By: Dharna Noor. Dharna interviews Phoenix Goodman of Public Bank LA. The Real News Network.
DHARNA NOOR: Welcome to The Real News Network, I’m Dharna Noor.
A charter amendment that will go before Los Angeles voters on November 6 could put LA on track to create the nation’s first municipal public bank. If created, the bank would put public dollars, that’s things like tax dollars and electric bills, into the hands of public officials. Proponents of the historic measure say that unlike for profit banks, which finance things like weapons manufacturers and fossil fuel extraction, the public bank would make loans to LA for things like public education and transit and invest in solutions to issues like homelessness and climate change.
Now joining me to talk about this ballot initiative is Phoenix Goodman. He’s a co-founder of Public Bank LA, an organization which evolved from Divest LA, you may know them for successfully lobbying LA City Hall last year to support divesting its accounts from Wells Fargo. He’s also a co-founder of California Public Banking Alliance, a coalition of municipal public bank organizations in California. Thanks so much for joining us today.
PHOENIX GOODMAN: My pleasure, thank you.
DHARNA NOOR: So, let’s start with the very basics. What exactly is a public bank? I mean, obviously it’s a bank which is publicly owned, in this case by the municipality of Los Angeles. But what does that concretely change about it, and why is it better than a privately owned bank like Wells Fargo, which you pushed LA to stop doing business with?
PHOENIX GOODMAN: Well, Wells Fargo and similar banks on Wall Street have one impetus, and that’s to maximize profits on a quarterly basis. And so, they’re not bound by any ethical guidelines in how those dollars are spent and what they do with their investments. What we want to create is something more than just a public sector bank, but really a people’s bank that takes us this immense power of banking, which is to create money and decide where the flow of funds goes into our economy and put that into publicly accountable hands to democratize the economy itself.
DHARNA NOOR: Yeah. Here in Baltimore we’re intimately familiar with some of the dangers of big banks like Wells Fargo operating with near impunity. Baltimore is the birthplace of the subprime mortgage crisis. In 2012, they agreed to pay a one hundred seventy five million dollar settlement because they steered mostly Black people into subprime loans. But if this amendment passes, if Charter Amendment B passes, what exactly would it do? What would the path to the creation of a public bank look like?
PHOENIX GOODMAN: That’s a good question. The Charter Amendment B is actually pretty simple and a really low hanging fruit towards a much longer process for the ultimate success. All it does is it removes a single barrier in the amendment to allow this discussion to begin. Right now, the city cannot engage in commercial enterprises, as the charter currently states, and it would simply amend that to create an exception for a public bank. Once that’s created or passed, assuming it passes, there’s going to be a whole slew of steps ahead; creating a business plan, creating a new type of charter at the state level and other details like that that will have to unfold over the next few years until the bank is actually created. But Charter Amendment B is the very first step in beginning that process.
DHARNA NOOR: And who is supporting this initiative? Who would benefit from the creation of this bank, and whose support do you have?
PHOENIX GOODMAN: Well, we have the support of City Council President Herb Wesson, who’s champion of this. A number of unions, many, many activist organizations across Los Angeles, Democratic clubs. So far, the opposition, as far as official opposition, has really only come from a few business organizations. But we even find that somewhat ironic, because actually this would help the local community. People’s concern about it is usually coming from a dogmatic assumption that anything public sector is automatically going to be incompetent and a squander of taxpayer dollars. But in reality, the status quo is that the benefit of handling our accounts goes to private Wall Street firms, which intrinsically by definition don’t have our interests in mind. So, we can only make something better, because at least this way, we have something that we can hold publicly accountable.
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