Why a State Public Bank?
Today, states put their money in Wall Street banks, allowing those banks to leverage our public funds in order to dominate the financialized speculative economy rather than reinvesting them in our communities. At the same time, states borrow money from Wall Street institutions and bondholders at high interest rates and pay large fees to keep money in their banks. This is not a cost-effective way to do business. States could be keeping their public dollars and leveraging them for their own community needs.With state-owned banks, we cut out Wall Street middlemen. Our community's cash stays home to benefit us! Bank fees are eliminated, interest costs drop, and public bank profits are reinvested into our communities.
Public banks can help us create the communities we want. We want parks, good roads, safe bridges, clean energy, and housing we can afford. We want lower interest rates for local small business loans, local control of our tax dollars, investment in our local communities, and ethical and transparent financial institutions managing our public funds. A State Public Bank can be the financial engine that makes this happen.
The West Virginia economy faces two major problems: job creation and infrastructure development. We have one of the highest unemployment rates in the country, and one of the worst ranked economies. Young people flee in search of career and livelihood elsewhere. In addition, our roads are potholed and crumbling, and many areas lack internet and cell service. The result is no economic opportunity, the diminishment of local communities, and widespread poverty.
Animating these issues are structural problems in the West Virginia economy, namely the lack of access to capital and diminishing state operating revenues. Lending has decreased rapidly in the past decade, and three-quarters of businesses report difficulty raising equity. In fact, small business loans are consistently about half of the national average. Without funding, businesses cannot operate: startups don't start up, entrepreneurship gets curtailed, and growth is hindered.
This means no jobs, no diversification, and a decline in tax revenues to fund infrastructure projects. So West Virginia gets left behind, while our State monies are invested in other parts of the country making large profits for big banks and financial investment institutions. There's a better way, a state public Bank of West Virginia.