Questions re PUBLIC BANKING ACT: Is the Fed a public bank?

U.S. voters (and other U.S. residents) who are working for a real democracy and true economic justice may not realize how far we’ve come in five years, but I believe that those of us at the grassroots are making history. Thanks to the internet and social media, we can actually watch history being made, sometimes on a daily basis: The Women’s March, Black Lives Matter, Occupy, resurrection of labor unions (as well as new forms of labor action). Every week the needle is moving, none so noticeably as in the money & banking reform movement. 

In the interests of moving history along even faster, this is an email (slightly edited) that I sent to leaders on a variety of U.S. monetary reforms: public banking, sovereign money, parity agriculture, and alternatives to GDP as our primary economic metric.

MAY 23, 2021 EMAIL

To:
–Michael Brennan (CA), convener of National Public Banking Alliance
–NPBA Google group
cc:
Advocates for the NEED Act
—Lucille Eckrich (IL), President – Alliance for Just Money
—Steven Walsh (IL), Treasurer – AFJM; Exec. Director – American Monetary Institute
—Sue Peters (NY), Board member – AFJM; Green Party banking & monetary reform
—Harrison Schultz (NY), a leader in NYC’s Occupy & monetary reform (NEED Act) movement
Advocate for replacing or augmenting GDP as our primary economic metric
—Ken Pentel (MN), Ecology Democracy Network

Hi, Michael and all —

Thanks for the great summary of Thursday’s NPBA conference call and your collective work in the national policy trenches.

In the interests of getting more of us on the same page — or at least talking to each other — I am copying some of my colleagues from other U.S. monetary reform groups. I think the current energy of the Public Banking Act — both the grassroots energy and Congressional interest — might help us all synthesize our respective (a) understandings of the U.S. money & banking system, and (b) policy goals in democratizing that system. 

More specifically, I’m wondering if the Public Banking Act can be combined with the 2012 NEED Act (sponsored by Dennis Kucinich, former Ohio Congressman). Hence my questions about PBA and the Fed. 

PUBLIC BANKING ACT
For those not familiar with the Public Banking Act (sponsored by U.S. Representatives Rashida Tlaib & Alexandria Ocasio-Cortez):

— HR8721 Official bill page Summary

— NPBA website: PBA talking points

— Michael Brennan’s democratic governance paper, referenced in the summary of last week’s NPBA call: “I’m publishing this paper on a democratic governance design for the LA public bank (applicable to questions of democratic design for public banks) – accepting any feedback!”

QUESTIONS RE PUBLIC BANKING ACT (PBA)

1. Does the Federal Reserve System reflect the major characteristics and the majority of characteristics of a “public bank” (as promoted in 2021 by PBI, NBPA, and others)?

2. Does the Federal Reserve System exhibit the democratic governance that you are trying to outline in your paper for the LA bank?

3. If your answer is “no” to either or both of those questions, is there anything in the Public Banking Act that would update the Federal Reserve System from the 2021 perspective of “public bank” and/or “democratic governance”?

4. Assuming your answers are no, no, and no, why does the PBA propose enrolling new public banks (state, county, municipal) into the Federal Reserve system which, by everyone’s account, is a most obtuse, intractable, undemocratic institution.

5. If any of your answers are “yes”, I might have to go back to Money & Banking Preschool. Feel free to tell me if I’m missing anything re the Fed.

Thanks for any clarification on this. 

COMBINING THE NEED ACT AND THE PUBLIC BANKING ACT?

At the moment, I am a proponent of the NEED Act, which would make the Fed a truly “public” bank (at the national and regional levels). But given that the Public Banking Act holds the attention of 2021 voters & U.S. Representatives (and the NEED Act does not have a current Congressional sponsor), I’m wondering if there’s a way to tap into all the energy that went into the NEED Act (energy that still exists) to tweak and support the PBA as the “new” NEED Act.

Here’s the links for getting quickly up to speed on the NEED Act:
— HR2990 official bill page Summary 
— Alliance for Just Money: The Just Money Solution: Three Critical Reforms

Note: A major selling point of the NEED Act is that it is an infrastructure jobs bill — a precursor to both the Green New Deal and Biden’s American Jobs Plan. And, of course, the NEED Act puts to rest the question “Where will the money come from?”

Additions to NEED Act/PBA?
I would also suggest that a really comprehensive NEED Act or Public Banking Act would include:
— Parity agriculture (enforcement of 7 USC Section 602) PLUS recognize healthy soil, water, and air as infrastructure
— GPI (Genuine Progress Indicator) as a substitute or adjunct to GDP as our primary economic metric

For anyone who wants to explore, here’s some quick links:
— 2020 Fact Sheet: Parity Economics and Monetary Reform
— 2019 Fact Sheet: Parity Is, Parity Is Not
— Current version of Minnesota’s GPI bill (very short & readable).
Ken Pentel is working with U.S. Rep. Ilhan Omar on a national GPI bill.