Javascript Menu by Jim's Eclectic World: Occupy Helena Community Dialogue Series March 25, 2012 Transcript - Wells Fargo Divestment Campaign and Public Banking Insitute

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Hi, my name is Jim Macdonald, and I have an odd assortment of interests. In no particular order, I love Yellowstone, I am an anti-authoritarian activist and organizer, and I have a background in philosophy, having taught at the college level. My blog has a lot more links to my writing and my other Web sites. In Jim's Eclectic World, I try to give a holistic view of my many interests. Often, all three passions show themselves interweaving in the very same blog. Anyhow, I think it's a little different. But, that's me. I'm not so much out there, but taken together, I'm a little unusual.

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    Monday, October 22, 2012

    Occupy Helena Community Dialogue Series March 25, 2012 Transcript - Wells Fargo Divestment Campaign and Public Banking Insitute

    (download audio 1:40:15)
    Location: Lewis and Clark Library, Helena, Mont.
    Frank Kromkowski: My name is Frank Kromkowski, and I’m a member of Occupy Helena, and I’m a member of a workgroup of Occupy Helena called the Community Connections workgroup, which has been doing a variety of dialogue events since December. Occupy Helena has been in existence since October 15 when we joined the national movement in support of Occupy Wall Street.
    This particular event today is the third in a series that we began back on February 26 called the Occupy Helena Community Dialogue Series, and last time we had Donna Peterson of Helena – who may be here yet later today – to talk about her struggles against Bank of America, which was carrying on this whole series of outrageous actions and then was trying to foreclose on her house. And she described that process, and had dialogued about that. The good news was that the day before they were to go to court to require Bank of America to cease and desist, Bank of America decided to stipulate that she was not going to have her house foreclosed upon without making any agreement that they had done anything wrong. So, that was the good news.
    But in our series, we have been dialoguing about issues related to Wall Street, and the banks of Wall Street, and the issues concerning the greed and the activities of Wall Street corporations – multi-national corporations – and how they’ve affected so many in the United States leading, of course, to the tremendous suffering that began in September 2008 on top of all the current suffering before that led to the loss of 20, 30 million jobs. There are still millions of people out of work right now as a result of the wheeler-dealer activities of these people.
    So, as part of the series then, today, we have Jim Macdonald, who is here from Occupy Bozeman along with some of the other folks from Occupy Bozeman, to talk about a campaign that they have initiated in Bozeman to help encourage divestment of funds from Wells Fargo bank. I’m very appreciative that Jim came over. He’s even got his son River here as part of the dialogue. So, it’s been very nice to have you here.
    Jim has been one of the main persons in the Occupy Bozeman movement, but he’s been involved in peace and justice and environmental activities for a long, long time. He moved to the Bozeman area at the end of 2007, and he co-founded Buffalo Allies of Bozeman in 2008, which used consensus-based principles for organizing around protecting the buffalo in Montana. In 2010-2011, he spent the entire season volunteering with the Buffalo Field Campaign. In 2011 (and if you haven’t visited the Northern Rockies Independent Media site for their activities, you should … he’s one of the people who is deeply involved in that), he joined that effort, which is an open publishing site for people of all persuasions who would like to spread the word about their activities or share dialogue with others. So, he’s been involved in that. Then, since that time when he got involved with Northern Rockies Indymedia collective, he’s been involved with Occupy Bozeman and has helped organize several actions, in particular its Wells Fargo divestment campaign.
    He writes a lot on the blogs, which is great because here’s a person who does his homework and researches and is as smart as heck as far as I can tell. And he dialogues with folks online and responds to their questions and concerns. You can find that at the Occupy Bozeman site – – or at the Northern Rockies Independent Media website.
    Prior to moving to Bozeman, he lived in the Washington, D.C. area for years and was heavily involved in anti-war and global justice organizing at the grassroots level there. One of the interesting things I did find out in the last couple of days was that he was the point person for a 15,000-person rally organized on a very small budget protesting George Bush’s second inaugural by having a counter-inaugural. So, congratulate him for that. He’s been involved at all levels of the anti-war movement from the regional to the national level.
    Without saying anything more, I’d like to introduce again and give the floor to Jim Macdonald of Occupy Bozeman.
    Jim Macdonald: Thank you. And, if you don’t mind, I’m actually recording this, and this will probably appear on the [Northern] Rocky Mountain Independent Media Network, which is And certainly we’d love people in Helena to share what you’re doing here in terms of Occupy, but whatever you want. It’s not just news; it’s cultural … if you have poetry, if you have pictures, art, philosophy, feel free to post it there. You don’t need a user account. Just a plug for my other group …
    I’m going to pass out some stuff. The first thing here is … I’m passing out stuff in part because I’m not going to cover every in and out of why you should not have money in Wells Fargo figuring this is a pretty friendly crowd, and I want to go a different direction with the talk. But this flyer here was put together by a group in Virginia called Blue Ridge Peace Action. They actually used the Occupy Bozeman materials in part for their research, and so there’s a connection across the country that we’ve already made from our work. And they’ve put together this great flyer “Wells Fargo: Facts You Need to Know.” And so I’m just going to pass this out. And the other thing I’m going to pass out is a series of writings – a lot of them by me, one of them by Josh Davis here. He wrote a satirical “love letter” to Wells Fargo. This has our call to action. There is an article write up of one of our actions early on even before there was a campaign, and it has some facts. Also, I wrote an article on many reasons why you should divest. I also have a frequently asked questions section, and then an article I wrote more recently on what I think’s at stake, which will somewhat be the theme – “Wells Fargo and the Loss of Our Voices: One Anarchist’s View.” And, I do identify as an anarchist. So, that’s from my point of view, not necessarily representing Occupy Bozeman, but me in that case because we’re a diverse group of people. So, let me pass these out and read them at your leisure. You obviously won’t be able to read them all while I’m talking.
    So, I just want to give a little background about Occupy Bozeman and how we got to the point of having a campaign against Wells Fargo, and why Wells Fargo and not some other bank – like for instance Bank of America which I know has played a part with the foreclosures here in Helena.
    Occupy Bozeman definitely got something of a slow start, I think, in regards to the rest of the Occupy movement. There was never an encampment. There weren’t a lot of protests. What ultimately happened and how it got started was there were some college students at Montana State University who said, “Hey, there’s no Occupy movement here; let’s start something.” And they spontaneously organized in a very short amount of time within a couple weeks in mid-October a march and rally that attracted about 200 people. And that was really great and beautiful, and it brought a large section of the community together. There was a big rally in front of our library, and people felt very positive.
    But what happened immediately after that was nothing happened. The students who ran things said next steps will be coming soon, and they didn’t come. And a lot of us in the community were wondering, “Wait a second. The Occupy movement was about no leaders … you know, everybody together … who are these students telling us … When are they going to act? When is something going to happen?”
    So, eventually with enough community pressure, the students said, “Okay, let’s have an open community meeting.” And we did some time, I believe it was a few weeks later in November. And there were over 40 people who showed up, but not having a real good sense of process, people not knowing each other, it was a lot of people – which was exciting – but it was a mess. The students became somewhat disgruntled because they didn’t necessarily want the consensus process. And it developed a “rift” in our community between students and community, a “rift” that kind of still exists. Actually, it’s not so much a rift; the students just stopped doing it.
    But the problem was the students over that time had started developing a website, Facebook, a lot of stuff, but they were no longer involved with the group. The community group, which was now shrinking to now 10, 15, 20 people now wanted to be able to organize, and we spent the next month trying to get our communications together, trying to figure out our internal processes, how to get access to the Facebook, the Twitter accounts – you know, developing a website. And that took awhile, and the group almost disappeared during that time because nobody was getting the word about anything.
    So, things got really slow, but eventually we got access to the Facebook, and we got access to the Twitter, and we got more stability in our meetings, and we again kind of grew. But not having a good sense of how to deal with that, we shrunk a little bit.
    And so it was in that environment of growth and shrinking, growth and shrinking that I was thinking, “Well, what can we be doing?” You know, we need to do something. We were doing little actions here and there, but we need to do something that feels like it’s in the spirit of Occupy. I mean, we didn’t have an encampment, but what was the encampment about? The encampment was supposed to be a direct assault at the one percent, at those who were creating the conditions of economic disparity. So, I thought, “Well, what if we had a constant presence of some sort, like in front of one of the big banks in town?” And, in Bozeman, there really are only two big national banks – Wells Fargo and U.S. Bank. And, so I thought, “Well, why don’t I just raise this to the group in one of our smaller meetings?”
    There was some excitement about that. The thinking was here’s some space that we’re somewhat occupying, and we’re also doing something to go after what we took in theory to be one of the big problems in our society – the power the big banks have over us.
    And so that’s how it got started.
    And we had to decide U.S. Bank or Wells Fargo. One big argument for U.S. Bank is Montana State University has their accounts at U.S. Bank. But in our research and the group that was there, we found so many more egregious things going on at Wells Fargo that we thought it might be easier to do the research for a campaign at Wells Fargo. And, of course, there was some discussion in the group. The idea was we needed to focus. If we didn’t focus, we would be just scattered to the wind and get nothing done. So, that was why we chose to focus on one bank.
    Then, it was a matter of writing a call to action, but even that wasn’t simple because there was an argument in our group. Do we tell people to take their money out of Wells Fargo and put it into any local institutions? Or just credit unions? Or, are local banks okay? We argued about that, but we ultimately had no consensus, so we just broadly said local institutions.
    But, we eventually got somewhat going, and we started doing research, and I started doing research, and a lot of that research is either in the packet of stuff I gave you or pointed to from that packet. If you go to the online stuff, it’s a lot easier to find where I’m getting the information from because I don’t actually put my sources in explicitly, I have direct links. And that’s why it’s easier to see online.
    But, the idea was this big overwhelming presence that’s clearly doing great damage. It turns out that we didn’t know anything. We knew the big banks were a problem, but it turns out Wells Fargo is the fourth largest bank in the country and the nation’s leading mortgage lender. Well, obviously, you know, that was something you needed to go after – because the mortgage crisis precipitated what happened. And the theory behind the campaign is that if you get the money out of the banks, and you do have that money more locally, then we have more local control over that and therefore we have more voice and more power and more ability to deal with injustices so that big things don’t just happen and tear us apart.
    So, that a little bit of it.
    And it turns out that big banks have higher fees than smaller banks and credit unions. And big banks have higher interest rates than smaller banks and credit unions. And you have no say ultimately when you make an investment where that money goes, but if you are a member in a credit union – theoretically, at least – you are part of decisions making; you have some say in the governance of that institution. Big banks are more likely to spend the money elsewhere. Smaller institutions, credit unions are more likely to keep it at home.
    Then, there were other things about Wells Fargo we discovered – like they have $120 million ownership stake in two private prison corporations. One of them, the Corrections Corporation of America, actually helped co-write SB-1070 in Arizona, which is the anti-immigration law. So, it was like, “Woah!” So, you give money to Wells Fargo, and they’re using it to privatize the prison industry, and we also know in Montana what that’s done in some communities, where you have a financed prison that’s just sitting empty, where there’s an incentive to put people in jail for profit. And so that was interesting.
    Wells Fargo does not give mortgages to homes that could be leased for natural gas fracking, but they’re also big financiers of natural gas fracking companies. So, you give money, and you don’t know where it’s going to go. It also goes to environmental causes, too. It goes all over the place! But you don’t have any say.
    A big corporation like Wells Fargo, because it’s responsible to shareholders, takes all this money off the top, and gives it to their biggest shareholders and investors, but they can screw you over in the process. And we’ve seen that over and over.
    So, obviously, if you could do something to hurt that bank locally, then maybe you could make a difference; maybe you could inspire other communities to be doing the same thing. I mean, that’s the theory behind it. Here’s a pillar of the problem, hurt that pillar, move it somewhere else that’s more helpful, and something good happens.
    And the fact is, these sorts of divestment campaigns have worked in other fields. The most famous is … I don’t know if anyone here is aware of Huntingdon Life Sciences? Has anyone heard of that? Huntingdon Life Sciences is a British company that is notorious for its animal testing. Whatever you feel about animal testing, those who oppose that – and they [Huntingdon Life Sciences] have an American subsidiary – formed a group called Stop Huntingdon Animal Cruelty or SHAC. And they engaged in a divestment campaign with many facets, very controversial. But SHAC was successful through its various tactics of getting Huntingdon Life Science’s stock to fall down so low that it was no longer listed in the New York Stock Exchange.
    So, very effective actions … and there’s no reason why we couldn’t do that with a bank particularly since we do have one point of leverage on a bank. A bank never has as much money as it has created to give out. Why [inciting] bank runs are illegal is if everyone takes their money out of a bank, a bank topples in that sense more easily than some other institutions. If you boycotted Coca-Cola – which there is a big worldwide call for a boycott of Coca-Cola because of their labor practices in Colombia and water practices in India – it’s not the same. You stop buying Coca-Cola, all their hurt is your purchase. If you take money out of your bank, it’s hurt more because they’re overleveraged beyond that.
    So, that was the thinking.
    But, you know, am I going to tell you the truth that we’re being really successful? No. I mean, Wells Fargo is strong. We’ve had a couple protests outside of the bank, didn’t develop into a regular picket, which was the idea. It’s really hard to get energy going. We still have meetings that range anywhere from 7-11 people – at a typical Occupy Bozeman meeting.
    So, we’re working on it, but I sense what’s really happening is that there’s a great sense of disempowerment. And I think this is directly related to what banks do to us, and that’s sort of the focus of where I want to bring this to.
    Because banks are so strong, because banks have become too big to fail – whether it’s Wells Fargo or Bank of America or Citigroup or Chase – they become so large that if they fail and the government doesn’t rescue them, the whole economy collapses. Because banks know this, they have incredible say over our lives. And it’s worse than that because none of them are elected, right? So, we don’t have any real power against the banks, and yet they’re destroying us. We’ve seeing how fraudulent activities can almost drive someone out of their house here in Helena, and this is happening all over the country.
    But what can you do?
    If you raise a fuss against the bank, and the bank starts going under, the government just steps in and has to bail them out because everything is tied together. So, there’s this incredible radical disempowerment.
    And you can say, “Well, let’s vote somebody else in.” But if you vote somebody else in, they’re doing the same thing. You know, Bush was for the bailout; Obama was for the bailout. Whoever comes in is going to be for bailout. And if they’re not for bailout, well, what happens? Everything collapses! And, who gets hurt? The poor, right? So, we’re in a sense of being stuck, a sense of radical disempowerment where our voices really don’t matter.
    I think that’s the feeling that goes on in a place like Bozeman about Wells Fargo, that we don’t feel we can take action in any meaningful way that will actually bring about a difference. But the longer we do that, the more this problem perpetuates itself. And so we need to find ways, and I think a divestment campaign where you are telling people, “Don’t just take your money out of the system but put it back into some local means,” is a way if things did suddenly crash that you would still have some local economy, more empowerment at the local level in which to act. You would suddenly have more voice, more sense that what you do matters.
    But ultimately, what does it take; how do we get there? How do we convince people that this makes sense, that you need to take action? That, if it’s not in banking, it’s something else? That we have the confidence of our convictions to move forward? And I guess that’s ultimately where I want to drive the discussion … not why Wells Fargo, what is so bad about Wells Fargo, how does that compare with Bank of America. You know, who cares? It’s obviously a huge problem all the way around, and the real problem is us. How are we going to react to that? How are we going to feel like we can take action and matter and have a voice and take actions which help restore a voice for everybody else so that the obvious disenchantment that people understandably feel suddenly has an outlet – where suddenly they matter.
    What’s nice is that we’re in a small group, and we can speak to each other. How do we create a society where our speaking to each other matters? Because right now, they don’t care. They don’t care that we’re here; they don’t care that we’re talking. That’s why they let us talk. We can talk because they’re still making huge amounts of money because too many of us are still invested in those banks. Too many of us are still invested in a system with nowhere to go. We have to give them reason to worry about us, to think that we can hurt them and that we’re doing so in a way that’s actually helping ourselves and helping our communities – not just helping ourselves in a selfish way but helping each other.
    That’s why in that light, in that sense of not me just preaching to you, I want to invite one of our members of our group, who is working on an alternative, who is trying to think of the transitional ways that we can take power away from the big banks and bring it closer to home.
    Josh, here, has been working on an initiative called the Public Banking Institute, which is an idea to bring … it’s sort of like the Central Bank, but it’s the Central Bank at the state level. It’s something they’ve been doing in North Dakota, and in the spirit of empowerment, of not me just saying, “Be empowered!” but to actually share it, I want to in that vein, invite Josh to speak and then to open up the discussion to give you an example of something somebody is doing to help us out of this malaise.
    Josh Davis: Thanks, Jim.
    My name is Josh Davis. I’m been living in Missoula for about the last 12 years and just recently moved to Bozeman and was involved with the Occupy group over in Missoula before I moved.
    A number of us in conversations with other Occupiers were interested in the banking system and alternative banking systems. As I kind of started looking more into that, I became aware of this idea of public banking, which is something – as Jim said – that the state of North Dakota has been aware of and has been making good use of for almost a hundred years now since 1919.
    They have a model there that a lot of people across the country are now looking at and looking to replicate in their own state, and so I kind of got involved in this campaign. It turned out there were already other people working in this vein and toward the same kind of goal. So, I got hooked up with them through the Public Banking Institute, which is a non-partisan think tank out of Sedona, California, I believe. They’ve only been around for about a year and a half, and just dedicated to trying to help states create their own state banks, their own public banks.
    The basic idea behind the state bank is that, “All right, our state collects taxes and fees … where does all that money go right now?” Well, I hadn’t really ever thought about it; most people don’t. They think, “Oh, I pay my state taxes, and that goes to the state, and they must have a room somewhere where they keep them all or something.” But no, what actually happens is the state of Montana has an account at U.S. Bank just like you or I would have an account – only this account that the state has is much, much larger, of course. So, all of the financial transactions that our state does right now basically goes through U.S. Bank. There are various state agencies that have their own accounts at different local institutions at big banks around the state. But for the most part, we have a big account at U.S. Bank here in Helena.
    The idea is that rather than having the state deposit all of this money with U.S. Bank, that the state would have its own bank and that the fees and the taxes rather than becoming a deposit for U.S. Bank would be a deposit at the public bank. Then, once you’ve got this public bank, you can do like they’ve done in North Dakota, which is you can determine on the basis of wanting to promote economic development or standard of living in your state you can determine who you want to give loans to and what kind of loan programs you want to offer. It really is kind of the payoff of having a state bank.
    So, in North Dakota, what they have is loan programs for agriculture. They have loan programs for students, for higher education. They have loan programs for small businesses, and they also do some mortgage loan kind of programs. What this does is basically make credit available to businesses in the state of North Dakota that might not otherwise be available – to businesses, to ag folks, to students – and at lower interest rates, more affordable credit.
    What we saw in 2008 is that our economy requires credit, requires the flow of credit to be able to keep operating smoothly. And when that system seizes up, it has cascading effects. And we feel it down on Main Street as well. So, part of what a public bank allows is for … it kind of puts a buffer between your state and the independent local banks in the state and the larger national credit system.
    There was a conference call just this last Friday that included the president of the Bank of North Dakota, the head of the North Dakota Banker’s Association, and a couple of presidents from independent banks in North Dakota that partner with the Bank of North Dakota. And that was one thing that they kept kind of pressing home was that the credit crunch in 2008 did not hit North Dakota at all because they have a public bank that partners with the local institutions.
    So, how the Bank of North Dakota works, is they have all of their state money in their own bank that they run and that then they have loan programs. The way these loan programs work is they partner with local banks and credit unions to provide loans. So, for instance, the small business loans … the Bank of North Dakota will provide say a backstop – a guarantee – on a small business loan maybe for a business that might be a little bit riskier than the bank might normally be willing to make a loan for or maybe that’s too large. So, basically the state bank is helping the independent local bank to offer more services, to offer specific loan programs to make sure that there are adequate supplies of credit, I guess, in the North Dakota economy.
    So, the idea is that we’re going to take our state money and we’re going to make sure it’s used to create economic development in Montana rather than taking all the state money, giving it to U.S. Bank, and letting them make loans to whoever for whatever wherever they feel like.
    There are a number of conceivable benefits to having a state bank. One of the major ones, I think, is really this kind of insulation from the really screwed up national banking system that we have, and that seems to be what North Dakota has … they were kind of insulated from all of that. Having some more control over what our state money is going to be used for …
    Anybody have any questions? I didn’t really prepare too much. Sorry, I’m just sort of rambling.
    Participant: I think you’ve both done a great job, a terrific job. I was just wondering if maybe the reason why there aren’t more state banks and more government banks is that it’s such a huge source of political campaign funding and that by privatizing banks then they can fund the political campaigns? If you have a state bank, then don’t politicians maybe can’t get contributions from a state bank for political campaigns?
    Josh: Well, yeah, the state bank itself in North Dakota – the only model or example that we have – they’re not going out and making campaign contributions as a bank for obvious reasons. It would just be as strange as, you know, the Fish and Game Department making contributions to some gubernatorial candidate. It wouldn’t make any sense.
    So, definitely the people who have, or the interests that are opposed to this sort of idea of states having their own banks are the big multi-national banks – the Wells Fargo, J.P. Morgan, Bank of America, these folks – because right now they have a monopoly, they have an oligopoly on this market.
    Montana is a fairly small state. Our ending balance in 2010, I just looked, was $250 million or something – not a real huge amount of money. But if you think of a state like California, California’s in the same situation that we are. Their state funds are going into, I don’t know, probably Bank of America or Wells Fargo – an account at one of these banks (huge, huge amount of money). And so obviously, you know, U.S. Bank of Montana or whoever California or the other states are banking with definitely has an interest in making sure that they don’t lose huge deposits.
    Up ‘til recently, it seemed like it wasn’t a big deal. Why not use Bank of America or have Wells Fargo? They’re sound institutions, but it’s become quite clear that they’re not at all sound institutions. They’re rife with a lot of fraud, and that hasn’t been dealt with adequately on a national level. So, I think that it might be a little more apparent now why we would want to have our own bank. I mean, even if the private banks and big multi-nationals were operating in a totally legitimate manner, it would still be a good idea for us to have our own bank so that we can have some control over what our deposits are being leveraged upon.
    But given the case that we have now, it’s even better idea to not have to do business with what we’ve discovered are pretty fraudulent and corrupt businesses.
    Right now, Hawaii is currently considering state bank legislation. Oregon … they were looking at their last legislative session, and it will be coming up again in their next one, I guess. There are about a dozen states that are looking at creating a state bank in one form or another.
    Really, the only people that are not going to benefit are the big major banks, the big multi-nationals now. If the state banks are run along a partnership kind of model like North Dakota is, it’s going to make local banks a lot more competitive. They’ll come out net winners for sure.
    Jim: I’d like to pick up, though, on your point about elections. Wells Fargo spends … you can go to and see what kind of money they are spending on political campaigns. They’ve spent more money on lobbyists and lobbying in the last year than I think they ever have.
    The big issue is they are not accountable. They were a party to the deal – along with Bank of America and the other big banks – on the fraudulent foreclosures, which came to … I think Wells Fargo’s share came to $2 billion, $3 billion, which is simply one quarter of their net profits. They already had accounted for it. They’ve been fined millions in settlements, but it’s nothing. They made $15 billion not in gross profits but net profits last year alone.
    So, you know, how do you take this on using the political system when they already have so much control over it and are not accountable? And so, trying to decentralize that with state banks, credit unions … obviously, I don’t know what else to do, and it’s a hard fight. But I don’t know what else we can do.
    Participant: And it would be the legislature probably that would have to establish a state bank?
    Josh: Right. So, the kind of campaign that myself and really Sheena Rice and Molly Moody with the Montana Organizing Project – which is a coalition group of labor and progressive religious organizations in the state – the campaign is to present legislation in the 2013 session to create a state bank. If we can’t get it through the legislature, then we would consider taking it to an initiative. Basically just because of speed and procedure and ease of getting something passed, we’re going with the legislative route first.
    There were two bills in the last legislative session – one that would have created the state bank that was introduced by Joe Reed, who is a Tea Party Republican; the other one was the bill that would set up a study commission to look at a state bank, and that was introduced by a progressive Democrat. We don’t want a study commission bill. There’s a couple of states looking at that; we don’t think that’s really necessary. So, we’re going to have some progressive Democrat – I would imagine – who is going to submit legislation in 2013 to start a bank.
    I don’t know if this is really a propos to what you are talking about or not, but one of the concerns has been like, “Okay, well, you’re going to have this big bank, and it’s going to be run by politicians. And, of course, that’s going to be just ripe for corruption.” You don’t want this financial institution jerked around by politics. That’s maybe a concern, but the way that it’s set up in North Dakota is … you have the governor and the head of the Department of Labor and Industry and somebody else – the head of the banking regulatory agency – are on an oversight board that makes sure that the bank is doing what they think needs to be done. But then, the actual day-to-day operations are being done by people who are professional bankers.
    One big difference between the state bankers and the big private bankers is they’are being paid a salary; they get the same regardless of how many loans they make. Their goal is to benefit the state and the people of the state. Their goal is not to benefit their stockholders and themselves. With the big banks, we’ve seen mostly it’s about benefiting the executives – not even the stockholders so much.
    Participant: So, is the ownership model for the public bank that the state and thereby the citizens of the state are the owners?
    Josh: Yeah. There’s a couple different ways that it could go, and we haven’t really talked enough with people to find out what kind of model we’re going to suggest. The way North Dakota does it, is it’s the Bank of North Dakota is the state of North Dakota doing business as the Bank of North Dakota, which means that all the state land is also an asset of the bank.
    So, this is an interesting idea in that wow, all the sudden the state of Montana owns a lot of property; it’s got a lot of value. You could have a really big bank really quickly. There are some reasons why you might not want to do that and rather there be a separate agency set up within the state that would own the bank, that would run the bank so that if you put some separation in there. But we would have as much democratic control over a state bank as we have over the rest of our state legislature at this point.
    Participant: Are they insured by the FDIC?
    Josh: No! That’s one interesting thing with the Bank of North Dakota is that the state insures all of the deposits at the state bank. This Bank of North Dakota doesn’t really take private accounts. Like, I couldn’t go and if I lived in North Dakota just open up an account with the state bank. Municipalities have accounts with the state bank. The state, of course, has their own account at the state bank, and the state itself provides the insurance for those.
    The FDIC insurance … a couple of things, one it allows the banks that are partnered with the Bank of North Dakota … they don’t have all the regulations that FDIC banks normally would. There are safety and soundness regulations, but I don’t know enough about the ins and outs of the banking system to know exactly what’s going on. But apparently there are some definite benefits to banks in not having to abide by all of the FDIC regulations. They don’t necessarily make the bank less stable but provides some advantages. For North Dakota itself, and the same goes for Montana, FDIC insurance for Montana means nothing because FDIC insurance is up to $250,000. Well, what’s our account at U.S. Bank? It’s $250 million. So, if we have to rely on FDIC insurance for the state, it does us no good. We get $250 grand back, and we can all, I guess, divide it up. So, it really doesn’t make any difference if the state has FDIC insurance or not.
    Participant: So, people cannot put their money in it?
    Josh: No. Yeah, for the most part that’s true. There are some exceptions, and I think that like five percent of their accounts are private personal type accounts for whatever reason. But yeah, the vast majority is just state money and then municipalities.
    Which is one thing in Montana … all of our city and county governments also have back accounts with U.S. Bank or Wells Fargo or whoever they’re banking with right now – for the most part because only the large banks can provide all the services that the municipalities need. However, if we had a state bank like North Dakota, that’s where the municipalities do their banking.
    So, setting up the state banking would amount to a large divestment campaign by other means. That’s not necessarily the spin that we’re trying to put on it, but that’s definitely one thing that would happen. It would take a lot of money out of private banking – not out of the private banking system per se but just away from these particular banks, the big multi-nationals. It would make it available to local banks.
    Participant: Well, it might be private accounts, but it’s our money; it’s public money.
    Josh: Right.
    Participant: And, it gives the public a say where it goes.
    Josh: Right, yeah, it’s public money that right now is just being placed in private hands, and they can do whatsoever they will with it.
    Participant: Do you remember the bill number in the last session that Joe Reed sent?
    Josh: No, it was eleven something, I think? [note: actually, it was HB 643]
    Participant: And, he was the sponsor?
    Josh: Yeah, Joe Reed was the sponsor of one. Both of those bills died in committee with pretty even bipartisan support, and what’s the opposite of support?
    Participant: Opposition.
    Josh: (laughter) Yeah, opposition, yes.
    Participant: So, when you say both bills, the second bill had to do with a study commission? An interim commission?
    Josh: Yeah, it would create a study commission to look at different options for creating a state bank and whether or not it would be a good idea.
    Participant: Okay, and if I went to the … marked where they’ll go … and searched for the public bank, I would find it?
    Josh: Yeah, yeah, if you do a Google search for Bank of North Dakota, which is the BND, it will come up with their website and tells you everything you would ever want to know about how their bank operates.
    Participant: Did you get the impression that Reed’s bill had any what you might call any intellectual substance behind it, or was it more like a resolution?
    Josh: No, Reed’s bill did have some substance behind it. It had a lot of problems as well. It didn’t, I think … what we want to do is our bill should be fairly cut and dried. You know, we don’t … it was like 60 pages or something ridiculous, and he had a whole bunch of changing how the money in how the coal trust was used, which obviously is going to be a non-starter and raise up all kinds of hackles. And then, there were a lot of things that were in the bill that didn’t necessarily have to do directly with creating a state bank. I was reading [and thinking], “Why were you putting this in here? Why were you even talking about that? It seems to me to be an unrelated issue, and maybe it’s some pet issue of yours that you kind of decided to throw in there.” I think it was pretty flawed bill. I’m kind of glad it didn’t pass, and that it’s not the version of the state bank that we got. He had a really dumb name for it, too. He wanted to call it the Last Chance Bank of Montana … (laughter) … That sounds bad. I know, It’s definitely Helena-centric, but …
    Participant: Can I raise another issue? I know we have our investment board, which I think invests. What money is that that is being used?
    Josh: All right, actually my father came by earlier to drop off a pair of shoes I left at his house last weekend, and he was asking me a similar question …
    Participant: So, is it pension funds?
    Josh: So, I’m not sure exactly on how the Board of Investments interacts with the treasury guys and how that all works, but my guess would be that it wouldn’t change very much …
    Participant: What I’m trying to get at is the pension funds – because that’s in like California where they would have huge clout if they chose a different bank or if they chose a different investment bank, and I think that part of where I’m not sure – maybe that as teachers and retirement and investment funds for the state may be a part of it … (inaudible) … My question is what ‘s the connection of pension funds and those funds that have been invested versus this idea of a public bank?
    Josh: Well, I think it’s pretty much a separate issue. This is all just kind of my understanding. I have a bachelor’s degree in economics, but I just kind of read about this stuff on the internet.
    The pension fund investments … that’s money that’s invested; that’s not money that’s sitting in a state bank account. Our pension funds here in Montana – like pension funds all over the country – have been totally screwed by the banks. And, we’re sold a bunch of shoddy fraudulent products, and now it looks like investors’ (mostly) pension funds are going to end up paying for this mortgage settlement since it looks like they’re banks are going to be writing down first liens before their second liens. I don’t know if anyone’s been following that; it’s kind of crazy. But it looks like the pension funds are going to get even more screwed with this settlement than they already have been.
    I don’t know that there’s really a whole lot of overlap. It’s not going to change … like, I don’t think the Board of Investment has probably been doing that great of a job if pension funds have lost a whole bunch of money.
    Participant: They’re not doing as bad as some (inaudible) … You know, the reason why this bill had the coal trust money in it is I think that whether it’s renewable energy or paying farmers, it’s often where people come up with the idea of let’s get that money that’s in that fund and use it for good public risks. And that debate and that attempt happens a lot, and part of why he went there. It’s a favorite place people go.
    Josh: Yeah, so capitalizing the bank is another thing. It’s one of the major issues that we have been discussing, and there are a couple of different ways that you can capitalize a bank. One, you can make the bank just a DBA of your state. You could also do a bond issue. You could take money from the general fund and just use money from the general fund to capitalize a bank. You could do that. Probably, I think the best idea would be to have a bond issue – $60 million or whatever depending on what size of the bank we want to have – to raise the capital for the bank. Then, the bank itself, just through the operation of the bank, can repay that bond.
    That’s the other thing I should mention with a state-owned bank is that the state bank is making loans to people through their partner institutions. When those loans are paid back with interest, that’s now revenue for the state. That’s going into the state bank. And in North Dakota, they’ve … the Bank of North Dakota has returned about over $300 million in the last decade to the state general fund. So, just kind of like the Federal Reserve gives their profits to Treasury and keeps some for themselves to keep running their bank, the state bank does the same thing. They keep whatever they need for operating expenses, and the rest of whatever profit they’re making goes back to the state. That’s great. The state can have more programs or not have to cut programs, you know, or cut taxes, or something like that.
    Participant: I just googled it, the North Dakota state bank. There’s all kinds of stuff …
    Josh: Oh yeah, their website is great …
    Participant: There’s a lot of recent articles about it. I think it says they have $5 billion in assets, so they’re doing a lot even with a small asset base.
    Josh: Yeah, I mean, there’s only 600,000 people in North Dakota. I mean this is even smaller than Montana. There’s a lot you can do. That’s the thing. When you own a bank, you can make money out of nothing. You know, you can.
    Frank: I like the idea of the state bank, but even if we set up a state bank and then got some of the funds that are now placed in there from our state of Montana accounts from U.S. Bank, there would still be the issue of all the money that Wells Fargo and Bank of America, First Interstate Bank and others. Some are better than others, but still that’s not going into locally controlled, democratically controlled organizations. So, I think that we don’t want to put all of our … I mean Wells Fargo campaign appeals to me because in addition to this which raises issues about how public tax funds are not under the control of the people …
    There’s still all these funds that we each control that Wells Fargo is using in ways that I would not want them to use if I had money with them rather than credit unions. But I think that we still need to divest from Bank of America and Wells Fargo because if you go down the street and do a survey, I think you could find out that people don’t know how bad Bank of America and Wells Fargo are, that they would be shocked to learn that Wells Fargo just charges higher rates to poor people. I mean, it’s a criminal type of activity ethically – maybe not criminal but probably legal, but it’s unethical to be doing these kinds of things.
    So, I would like to say in addition to this track for the creation of a state bank that we need to continue these divestment campaigns and then maybe work with Public Citizen or another organization that’s trying to break up Bank of America. It’s too big to fail; therefore, let’s break it up because it is too large and has too much of an impact if it fails. So, we need to break it up – not just say, well, there’s nothing we can do, just bail them out. Break them up, which is what Public Citizen has talked about doing. Take at least those three actions are parallel tracks.
    Josh: For sure, what Jim’s been doing and the other Occupy folks with the divestment campaign and what I’ve been doing with the public bank are kind of two separate …
    Frank: But, they’re all important.
    Josh: Yeah, they are related but separate campaigns going on, and they are definitely both important, I think. And, it’s interesting you mentioned breaking up the too-big-to-fail institutions. The Dallas Fed just came out with a report saying that the too-big-to-fails are still too big to fail and that we need to do something about it ASAP, which is a little bit surprising and somewhat encouraging, I guess, coming from a federal reserve bank.
    Jim: In Bozeman, we have had a couple people tell us, “Because of the information you put out, we’ve taken our money out of Wells Fargo.” We’ve had people internal to the group who said, “Oh my gosh! I have an account here; I need to get it out.” The question I have is how can we – and it doesn’t have to be Wells Fargo – (but working on these issues) encourage each other to take actions. I mean, Josh is one person who because of his background … I want to emphasize not just what he’s doing but the thought process that brings him there. “Hey, I have knowledge about banking from what I read, I have a degree in economics. Here’s an idea that I think can be worthwhile. I’m going to just do it and get involved and become the Montana point person for the Public Banking Institute.” What keeps us from taking those steps, or what can we do to encourage each other to take steps – whether it’s banking or some other related issue regarding our disempowerment in society, economic and otherwise?
    I just want to throw that out there.
    Participant: Well, we’ll put an article about that in our newsletter and spread that around.
    But, you know the health insurance industry has slowly changed where more and more organizations like the state are self-insuring, and now the governor has approved this new health insurance thing that’s – cooperative, right. So, the whole idea of getting smaller and more local is kind of gaining some traction. It’ll be slow, but at least we’ll put something in our newsletter.
    Participant: So, are you aware of any kind of constituency in North Dakota that’s opposed to or wanting to get rid of the bank, or has it been so successful that’s it just popular there?
    Josh: In listening to the North Dakota bankers talking about it on Friday on our conference call, nobody really brought that up. I would assume that the big multi-nationals would be more than happy to get rid of the Bank of North Dakota. But when it comes to the local independent bankers, everybody was pretty much positive. They were all very positive about the Bank of North Dakota and were very clear that being able to partner with the Bank of North Dakota helps them compete with the large multi-national banks and offer services they otherwise wouldn’t be able to offer. I think they have the highest local banks per capita. They’ve got a very good sound local banking system there. So, anybody trying to get rid of the bank … I think at this point they’d have a really, really hard time doing that because it’s been around for almost a hundred years. It really has become a part of the culture. The only people I can think of that would have a real interest would be people like Wells Fargo, Bank of America.
    Participant: It seems like that could be a pretty good thing to know or get a handle on in terms of trying to get something, the argument being, “Hey, they’ve got this in North Dakota, and everybody love it.”
    Josh: One of the reasons we organized this call with the North Dakota bankers was because with both the bills in the last session, the arguments against tended to come mainly from local bankers who thought this state public bank is going to compete with me, is going to take customers away. And that’s just an education issue because that’s not at all what we’re talking about and that’s not how the BND works. So, it’s one thing if I’m saying it to some banker who is against this; it’s a whole other thing if Eric Hardmeyer, the president of the Bank of North Dakota, or the president of Alerus Bank in Grand Rapids, is telling them – or some town in North Dakota – is saying, “Look. It is good for us; it has helped us compete.
    Participant: I have a question, Josh. How come we don’t just use the local banks and credit unions that are in place instead of establishing yet another bank?
    Josh: What a larger institution can do is provide services that your local credit union or Rocky Mountain bank or whatever can’t provide just because they’re just not big enough, you know?
    Participant: Services like what?
    Josh: So, for instance, if there’s a big development project or some industrial development, and some developer or some businessman needs a loan that’s $3 million. You’re not going to be able to get that maybe from the local banks that just don’t have the capacity to be able to provide those kind of large loans.
    Jim: So, I want to throw in one thing. One reason we shifted focus from U.S. Bank to Wells Fargo was the question was raised, “What is the alternative for Montana State University to move their funds from U.S. Bank? Can the credit unions in town actually handle that account?” And, there was a lot of doubt whether that was even possible. So, obviously, there’s another problem besides simple divestment.
    Participant: I think it’s just what Josh said … that credit unions are limited in the size of loans they can issue.
    Josh: Right, and also, even with local independent banks, those banks are … their goal for that institution is to make a profit and to make as big a profit as they can reasonably make. And, that’s fine. I don’t necessarily have any problem with that, but what having a state bank allows us as a society to do is say, “Okay, look. We really think that our college students should be able to get loans to pay for their education and not have to pay 6%. We want to be able to give them a very low interest loan. We want to support our agricultural sector. We want to support CSAs.”
    My personal hope for this is that we have a loan program to support cooperative worker-owned and managed businesses. Why having some kind of democratically controlled bank is a good idea, I think, is because then we can say as a society, as a state we can say, “Look. We want to support this particular type of development. We want to support this sector, and then we have the ability to make sure that credit and cash are available for those things rather than just depending on the local banks.” We’re allowing the local banks to do this and still be able to make a profit.
    Frank: Just thinking to myself that I try to study every day, but I’m really ignorant on many of these issues. But one thing I don’t know – maybe you’ve done some study on this – just as in the campaign to divest from corporations that were funding South Africa or now in Israel because of its occupational cruelties and other kinds of divestment campaigns that are international, when churches got involved and universities got involved, you had big bucks people. You know, I can take my money out of an organization that I find out is … you know, if I found out that my pension fund was going to Caterpillar or something like that, I could do something about that. But churches in Montana must have a lot of money somewhere. There are a lot of churches. I don’t know how much money they have; I’m not a member of any church, so I can’t go to my local … – I have been, but I am no longer. I can’t go to my local governing board and say “Hey, where’s our money!” because I’m not giving any money to these churches. But I would think that the Catholic diocese in Montana or the Episcopal diocese or the local churches or the Methodists in Montana/Wyoming have a lot of money. Where do they keep their money? Does anybody know, or does anybody study that?
    Josh: I can tell you one thing I know for sure is that the Unitarian Universalists have no money. (laughter) They’re broke across the state. That’s a good point, and I think it goes to what Jim was saying, is that feeling like you can make a difference … Yeah, it’s true, if I go and take all my $300 away from Wells Fargo like “Ooo, big deal!” Like, they could care less. But if I or you go to the institutions and groups that we have some involvement with and start having the conversation there and look and say, “Where is our church holding its money? Where are we banking? Should we really be doing this?” and make an issue to get some of these larger institutions that might actually have a little bit more sway and make a little bigger dent.
    Participant: I’m glad you said that because as soon as you said that, I realized, “I will do that”, the church that I do attend.
    Jim: Right, because an individual church is not likely to have an account so large that some other smaller institution couldn’t handle it. So, there is something between MSU and the various places we work. For sure, those are our points of leverage and the more direct we can make those, the better we are going to be as a society and the more hopefully things we do like this before we peter out. And that’s why it’s so important to be taking action now even if the odds seem astronomical sometimes.
    Participant: So, if you could get your divestment campaign to be perfectly effective for the goals that you’re trying to achieve, what are those goals? Is it kill Wells Fargo out of existence? Are you trying to make them good corporate citizens?
    Jim: Should I speak for myself, because I know there’s probably some disagreement. [One of our members here has brought this up]. She’s says, “What are we trying to do? Are we trying to ride them out of business, or we trying to change them?”
    Personally, I would like to run them out of business. I don’t see anything in that model where you have a shareholder model where people are taking their money and giving it to someone else that is conducive to a more economically just society. So, in Bozeman, we can’t run Wells Fargo completely out of business. This is just one branch, but if you can make some effect on the branch, then you’ve made a difference within your community. It makes it easier to go after U.S. Bank; it may even be easier to hold local banks accountable, which often have a collusive relationship with bigger banks – reselling loans to bigger banks.
    If that becomes an issue that matters and you can take Wells Fargo out – and that already seems like a big dream – then hey, suddenly, you’ve got a point where you really can tell other places around the country, “You also can do this. There’s no reason you can’t.” Hopefully, that spreads like wildfire.
    But, it needs to be simultaneous with moving money into more locally controlled institutions because we don’t just want another depression from banks collapsing all around us. We want something stable in its place. And that’s one reason I asked Josh to talk … talking about what are these transitional forms. Because ultimately, personally, I don’t want to even just see a state bank. I would like to see us in our communities be able to take care of each other – grow our food and – I’m more of a hippie in that mind – sustainability. But we can’t just go from A to Z without some pieces in the middle and that’s what I think the state banking initiative, the public banking initiative through state banks represents.
    Participant: I saw this on the Occupy statement – not verbatim – someone made on the site, I think it was, and they said, “Couldn’t it be that we’re not trying to take down the banks because they’re too big and they’re backed up by too much ignorance – which is just lack of knowledge.” What the guy said, “You do what you’re going to do; we’re creating something different.” And I think that’s a more effective thing than trying to do this us against them thing, and I think it creates a better energy that keeps more people involved – because say if we’re working on this divestment/educate and support the new state bank initiative, I think we’d have a lot more energy that would pull people in.
    Jim: Let me just respond to that because I think that’s been a tension throughout the history of anyone who wanted to do a re-creation of society, sort of mimics what early socialists in the 19th century argued about, whether we can sort of create our society simply from the ground up and ignore the larger society or those who say, “No, we need to attack the larger society and eventually things will also happen from the ground up.”
    Personally, I take a sort of simultaneous view that we both have to be creating but we have to be doing it in a way that’s also hurting. Because if we don’t, they’re going to see what’s happening, and they’re going to crush us. Or, they’re just going to let us go because we’re not effective. But, more likely, if we’re more effective doing this and they’re not hurt and they’re not feeling it, then they’re going to not allow that to happen. I think it has to be a simultaneous … realizing that we’re part of a bigger society where other people are being hurt by this, and we have to attack those abuses at the same time that we build up a positive. That’s my personal view on it.
    But others have taken a view that we just need to create and hopefully things will crumble from beneath, and that certainly could be right. I don’t know.
    Participant: Yeah, I agree with you, though. It’s kind of a two-pronged thing. But I think it’s important to consider the language we use and the energetics that are created through attack. War is war is war. And if we can engage in a different kind of … I realize that’s too “woo woo” for everybody, but I know how that impacts my life and my communities. So, it’s not about doing one thing over another; it’s about a two-pronged approach but how we approach it on a thought level.
    Jim: Yeah, we always had this in the anti-war movement. Are you anti-war or are you for peace? And, I actually felt more comfortable saying I was anti-war because I was afraid whenever someone said that they were for peace that they had a specific worldview of how they wanted peace to look like where anti-war seemed to unite us. We knew what we were against, and we would be free to figure it out. To me, “anti-war” was actually more positive even though “peace” sounded more positive. And I think that’s where we’re kind of getting at. The language sometimes resonates differently with different people.
    Participant: This move to bring a state bank to Montana … I mean, I was thinking … how feasible is it? How good are the chances? And also how soon do you think this could happen? Is it something we should strive for in five years?
    Josh: I think the odds of us being able to do it are actually pretty good. It was encouraging in the last legislative session to see on both the banking bills that the support and opposition were both pretty bipartisan, which says to me that this isn’t some left/right issue where it’s just a Democrat thing – just get all the Democrats behind it. It really is something that appeals to a broad base of people. Obviously, there’s also a lot of people voting against it on both sides of the aisle.
    Participant: It was put forward by a Tea Party person?
    Josh: Yeah, Joe Reed, actually. I was kind of surprised. He apparently had some pretty wacky bills that he also submitted. But we had a progressive Democrat and a Tea Party Republican both kind of on the same page, basically on the same page with this. So, I think politically that it is really viable. We’re going to have legislation in the 2013 session, and there’s no reason why it can’t be up and running within a year of that bill being passed. So, it’s definitely not something that’s a pipe dream, and like I said there are a number of other states also looking at it quite seriously. But we could well be one of the first.
    Jim: Has any thought been given to a referendum?
    Josh: Going through the initiative process is like if we fail in the legislature, I guess is the thought right now … mostly because of the amount of resources it takes to organize an initiative campaign. The MOPers think that it’s probably better to try it through the legislative process first. I’m willing to go along.
    Participant: Is there an organizing committee? Who’s involved with this? There’s already been a bill last time, and so there’s been a hearing and everything. It wasn’t on my radar last session. So, ideally, you’re going to have people actually bring it up in the campaign this summer and talk about it. So, when it gets to the session, people are going to “Oh …” , rather than it coming brand new on January 1, how is that going to happen?
    Josh: So, right now, Sheena Rice … she’s definitely kind of taking the lead on a lot of the organizing. She’s with the Montana Organizing Project (MOP). And she and Molly Moody – Sheena’s in Billings and Molly’s in Missoula – and they’ve been (and myself in Bozeman) and we’ve been doing, and Sheena has mostly been doing outreach to the legislators on the banking committee or whatever appropriate committee that is and talking to candidates. There’s been some discussions with Dick Barrett, I believe? I don’t even know if he’s still … yeah, Dick was an econ professor at U of M, and then was in the legislature. I don’t know if he still is in this next session or not. The candidate education is kind of starting right now and ongoing, and would definitely like to try to make it an issue, trying to do some education with the decision makers before we get too far along here in the process.
    Participant: You said the state Bank of North Dakota has been around since …
    Josh: 1919.
    Participant: So, I was thinking … I’m glad this is happening; it’s great, but why has it taken this long for the states to want to emulate that. Or maybe it hasn’t taken this long, and there’s been efforts to try and pass this?
    Josh: That’s a good question, one that I’ve gotten a number of times and don’t really have a good answer to – why hasn’t anybody done this sooner?
    As far as I know, the first real effort was this last session in Montana. I don’t know of bills … there may well have been before that.
    Participant: Actually, back in the 70s, when there was the subdivision thing was taking off, people who were looking at getting money to farmers were looking at the North Dakota model. I think there were bills, but they didn’t get very far. They were debated, I think, around ’74, ’75.
    Josh: So, there you go. Five years before I was born somebody was talking about it! I think what makes it relevant now – or maybe seems more relevant – is because of the financial crisis that we’ve been going through and that’s ongoing in this country and just the kind of realization that the big banks that we thought were rock solid are really not at all. I think the whole bailout fiasco has definitely pushed people to look at it a little bit more. And like I said, the credit crisis, the credit crunch in 2008, … that had serious effects. I was painting houses in Missoula, and I remember there was a morning when we got to work. And it was like, “We just lost two jobs last night, and this other contractor we’re working with, he lost a couple jobs.” The credit dried up, and all the sudden there was work that just wasn’t there because it was dependent on people getting loans that were no longer available just all the sudden overnight.
    I think a lot of people saw that, and it was like “Woah!” that was not fun, that was not a good thing. The reason it happened was because the national system has got some pretty serious flaws in it. And so, trying to make sure that we have control over our own credit system is looking more important.
    Participant: I was just thinking one of you mentioned the mortgage crisis and the pension funds being invested in mortgage-backed securities and other institutional investors being invested in those. And as all these mortgages fail, it seems like those institutional investors and pension funds should be able to sue the banks. If they can sue the banks, that should put the banks out of business, but I don’t know if this agreement with the attorney generals where the major banks only had to contribute $25 billion or whatever it was if that protects them from suits from all these institutional investors. I don’t have that figured out.
    Josh: I don’t think it does.
    Participant: I don’t think it did. I think they kept that. I think that’s something people were really worried about.
    Josh: There’s been some questions about that. I’ve been following it on the Naked Capitalism blog, which is a really good financial blog. It seems like there are still questions as to what exactly the release that the banks got was. The promise was that it was going to be a really narrow release and that they would still be open to lawsuits on a lot of other fronts. I hope that’s what actually came through. It looks like that might be the case. I just saw in New York, I think Schneiderman is filing suits against a number of the banks and the MERS, the Mortgage Electronic Registration System, for illegally avoiding all of the title transfer taxes. I think there are definitely going to be more and more lawsuits coming. And as this whole thing kind of plays out and the investors and the pension funds figure out “We’re getting screwed. The banks are getting credit for writing down loans that we own. How does that work?” I think there might be some more lawsuits coming. Let’s hope.
    Frank: I just had another thought about how ignorance plays into this because I would say if you talk to people about what happened in September 2008 and why it happened, you get various theories about what that is. You know something bad happened, but I think you’d get a level of ignorance – just people don’t know what happened and why it happened and Wells Fargo’s role in it or Bank of America’s role in it.
    The system that led to the selling of these derivatives and so forth … people would say, “I know it’s something bad, but what exactly happened?” It takes a lot of time to study and figure these things out.
    I talked to a fellow just before who couldn’t come to today, but I mentioned where I was going, and he said, “Yeah, I’ve taken my money out of Wells Fargo.” And he knew why he was doing that. I also talked to a person I thought was extremely knowledgeable – a former representative from the Helena area – who didn’t know anything about Wells Fargo. He’d just gotten a mortgage from Wells Fargo. And I mentioned a few of the things as I studied Jim’s materials there, and that didn’t come on his radar at all. So an otherwise very diligent person, who is up on all kinds of things, was as dumb as anybody in terms of ignorance, and basically knew nothing about this. And so, I said, “You better look into this.”
    Jim: One of my friends at Buffalo Field Campaign said, “Hey, a lot of us have our accounts at Wells Fargo. We’re only in West Yellowstone a few months out of the year. It’s convenient, the branches. I don’t want to have to keep finding a new bank.” But, totally ignorant or willfully ignorant that it’s actually costing them more money to do things that way. Even from purely selfish motives, it doesn’t make sense. It seems to because there’s a sort of convenience about it, and people who are right on on one issue, who understand the social impact of not having wild buffalo – in the news this week with quarantined buffalo being transferred to Fort Peck – understand the relationship of buffalo to American history and indigenous peoples. You know … very important ideas to understand America and American history … have no concept of the banking industry and capitalism, and so bridging these things between thoughtful people but making the connections between one thing and another is really difficult.
    Participant: Does that turn Occupy into an educational campaign?
    Jim: I think in part.
    Participant: It seems like that’s the need.
    Josh: I think a large part of it is … I know in Missoula that was one of the very first things that the encampment decided was “We all have a lot of questions that we don’t all have answers to, and we need to educate ourselves.” And so setting up the teach-in groups or whatever was one of the very first things they did. And a lot of this I think just is education. My girlfriend, for instance, she’s doing a Ph.D. in chemistry at the university there and hanging out with her other grad student buddies, and they’re all – you know – very well educated and fairly progressive … a lot of them. And I talked to them about the Wells Fargo thing, and they just have no idea. They’re like, “Oh! They’re not a good company?” If you’re looking, if you’re actually paying attention, wow, these guys have been engaged in some criminal activity for a long time, and it looks like they’re still doing it. And in a lot of other situations if it was some guy down the street that you’ve been doing business with and all this stuff came out, you’d probably stop. But, it’s convenient.
    Participant: So, here’s the big problem that I have. All of the banks are worthless. The Fed is the problem, and it continues to print money based on my grandchildren’s taxes. And that whole system is flawed. So, what’s the value in taking my money out of one big bank and putting it into one little bank at all?
    Josh: Well, regardless of what we might think about how our system, our macroeconomic system works – and the whole issue of fiat currency is versus some kind of commodity-backed currency, or should we have a gold standard or should … what should be going on – we can think whatever we want about that.
    The facts of the matter as they are right now is that we have these little pieces of paper, and they’re pretty important, and we can give them to this huge massive institution and have absolutely no say over what they do with them, or we can put them in a little institution that at least we conceivably can have some say – or more say. And that’s the thing, the state banking – in my mind – it isn’t like this is going to solve all of our problems and make the economy great and just and ya-da ya-da! No, not at all. It’s just moving in a better direction and kind of decentralizing our banking system a little bit.
    One of the things that the Bank of North Dakota does is it acts like a little Federal Reserve for the state of North Dakota, and that’s I think a pretty good thing and handy for those banks in North Dakota.
    Participant: And did you say that North Dakota has more community banks than anywhere else?
    Josh: Yeah.
    Participant: The state bank isn’t where you would move your money to?
    Josh: No, no, you just move it to a local bank.
    Participant: Maybe, a state bank would alert people to support the community banks more, and so the big banks will not have as many depositors.
    Josh: It definitely allows the independent and the local banks to compete with the big banks – a lot easier to offer more services to their customers.
    Participant: I think it also makes an argument, and obviously this becomes a major topic that has a chance to pass. People are going to come unglued, when you say actually for a Main Street business, the local banks of North Dakota like this. It’s actually an argument that’s going to get a lot of people in favor of it that may not totally buy into everything that Occupy does. It’s still come a long way towards putting up more of a bridge between the local economies and local banks versus the big banks. So, even if these other issues aren’t solved, it seems like this makes sense. It’s something concrete that we can come to.
    Participant: I think these [couple questions from different participants] … the question of what you’re trying to accomplish, and another historical model comes out of Martin Luther King and the Civil Rights Movement where in trying to make the sit-ins work, he suggested “bank-ins.” And he was very specific about saying take your money out of – to the black community in particular – take your money out of the downtown banks. That’s what he called them at that time and put them in the outliers – or the smaller community banks. I think it’s a powerful model in service of a higher goal, which tends to answer the question that you’re pounding at and really answers where we are going in a positive way.
    Frank: And, I think that works, but it worked for the Civil Rights Movement and the people who were directly affected because they saw that the black community was being screwed by the downtown banks owned by whites. I think they had to be convinced, but once they began to see the connection immediately that they were being hurt dramatically – and the economic boycotts were an important part of that – but for most people, including this one otherwise very knowledgeable person, … I talk to people as much as I can … this one person who was probably I would say one of the most knowledgeable students I ever met on global justice issues and this and that, who when he saw the film Inside Job, said, “Jesus! What I did not know about went down that day, and the banks rolling them. And I want everybody to see that movie.” Here’s a guy who studies all the time. I know this young man. He studies every day, and he’s been doing that for 15 years.
    Most people don’t study every day. If they watch some news, they might happen to watch FOX News, where you won’t learn anything about these things. People make fun of Occupy Helena, make fun of whoever it is that’s complaining about the system. Because education (inaudible) …
    The model, if you have the AT&T system – awareness, truths, and transformations – once you become aware, that you shouldn’t have your money … there’s no good reason to have your money at Wells Fargo or Bank of America … then you take it out. Why do you stay there? Convenience is no excuse. I mean, if you have an otherwise progressive person who says “Inconvenient because I want to keep my money there. You know … busy, busy, busy.” What are you busy about? Take your money out! And, just confront them with that. It’s not a matter of making them feel guilty but saying, “Hey! That’s no excuse.” It’s one by one to get us out of this system. I’m not sure how many people have to do it, but old Bob Holmes used to say “One by one by one makes a million.”
    Participant: In Occupy Oakland against Wells Fargo, ended up taking their money out and the next Monday putting it back in because they didn’t have another bank to put it in.
    Participant: Is that really what happened?
    Participant: Yeah.
    Jim: But, then they got it out.
    Participant: Ultimately. But the challenge is before us, and we’re entrenched in this mechanism.
    Participant: Historically, when did the banks become too big to fail, or were they always pretty much too big to fail?
    Josh: So, there was the S&L debacle in the ‘80s, and a lot of banks failed. I was just reading about this. I think the first kind of stealth bailout we did was in the early ‘90s of some investment funds for long term capital management? There was the one big hedge fund that I remember. They went tits up, and a lot of their investors got bailed out. Really, since ’90, probably, the last 20 years or so?
    Jim: Of course, before banking regulations in the ‘30s, this used to happen fairly regularly in history. England – Barclay’s. Bank failures would happen [en masse] every seven years, and inevitably there would be an argument whether banks should be bailed out, whether the whole system would fail. But, then things got stable. Maybe, one answer to why there hasn’t been a Bank of North Dakota discussion is that we had a remarkable era of banking stability unlike any in the history of banking over several decades.
    Josh: During the Clinton Administration, we started rolling back things like the Glass-Steagall Act, and that added to it immensely because all the sudden you had Traveler’s Group and Citicorp all the sudden twice as big as anything that ever used to be.
    Participant: That was the point I was going to make. It was when Bill Clinton signed off on a bill that took apart Glass-Steagall (inaudible) …
    Josh: But, there had already been some bailouts before that. I can’t remember what I was looking at. It kind of seemed like it was kind of this building process in earnest, one little thing. Smaller company fails and gets bailed out, and this kind of signaled to other people, “Oh! We’ll probably get bailed out if we fail, too.”


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