The Classism of “You Get Out of It What You Put into It” and other reflexives

by Matt
September 17, 2018

Assuming people have a nanny for their kids; assuming people can just get something taken care of “professionally;” assuming people can just pick up another of whatever they break, lose, or run out of; assuming “go to the doctor” is situationally good advice; these are all manifestations of classism that I’ve overheard one time or another.

Here’s an insidious kind of classism: “You get out of this [church/group/political org] what you put into it.” How often do we hear that and not think, wait, that kind of morale booster falls very differently on someone whose material situation leaves them with neither time nor money to give, but who nevertheless really needs the services, networking, or support that church or group gives them?

Hopefully, the more aware we are of how life’s inevitabilities land in very different places for different people, the more transitive our own material comforts will seem, and the less we will feel our desserts outweigh the fact that nothing is really ours.

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The Launching of Solidarity House Cooperative, and Our Communal Space

by Matt
September 14, 2018

In July of this year, the Solidarity Collective acquired, through a personal loan and the good fortune of being in the right place at the right time, the property known as Holliday Mansion, consisting of the large house shown in the picture (11-12 rooms in the main house depending on how you count them, a tower room, and a 3-bedroom basement apartment), a large Quonset hut, four additional apartments (one adjoining and three adjacent) and some small storage sheds. The house was built in 1878 and was a neglected (and over time, abused) historical treasure. Beyond the significance of its acquisition for our mission, its restoration will be a service to Laramie and Wyoming.

Those who have been following our progress in the last two years via our Facebook page and my earlier post here know that the purpose of getting this property was to create an egalitarian intentional community–a commune for shared living space and cooperative work space, food production, and a place where people could ground their activism and creativity in promotion of a better world.

It is significant that we’re doing this in Wyoming. As far as we know and as far as the Fellowship for Intentional Community reads, we are the only egalitarian/left community in the state. Two other intentional communities in early stages of formation, one in Cheyenne and one in Casper, are non-egalitarian; still, it’s interesting to see them cropping up at a time when Wyoming’s fossil fuel economy is in near-freefall and the political culture of the state is becoming more heterogeneous. We think there is a place for our radical cooperative model in Wyoming, but recognize that it needs to be materialized and lived so that people may see its possibility.

Although we’re pluralist about this cooperative economics and culture thing, we bring some basic agreements into Solidarity Collective:

  • we’re committed to cooperation and resource sharing, are practicing partial income-sharing now with a commitment to full income-sharing when all the elements are in place for it
  • we’re feminist, queer- and trans-positive, supportive of everyone’s gender and sexual identities
  • we’re committed to anti-racism and anti-fascism and we also incorporate our own reading of the Seven Principles of Unitarian Universalism (and the proposed 8th Principle on anti-oppression), although only some of our members are UUs.

There are about twelve people working high-gear on restoration and the financial maintenance of the property–these include core members, family of core members, active supporters who intend to become core members, and active supporters who are just really happy to know we’ve materially actualized a commune here.

That work is formidable and will be a long-term project. The large house has been through many cycles of ups and downs over the past 130 years, and to put it diplomatically, the previous owners and residents left us much work to do. The entire property needs to be re-painted, there is a long list of carpentry work to be done, individual rooms need detail work, parts of the plumbing system need replacement, and even the dirt on the grounds (there is a large pasture are in back) needs to be cleaned of years of being treated like a waste disposal facility.

Until we can do some soil remediation, our food growing systems will have to be independent of the pasture. Planning for vegetable operations and a greenhouse is underway. We have six laying hens now, and hope to raise as many as 40 more next spring, with other animals joining the farm as opportunity grows.

The end goal is a thriving collective, likely through conversion to a trust, but in any case the house and structures and land will exist to provide low- and no-cost, ecologically sustainable living and work space for as many people as it makes sense to live here.

We’ve also launched Solidarity House Cooperative, a worker-democratically-owned and operated production company. Support for our work through this production cooperative is one of the foundational structures of the communal system we are building.

The purpose of Solidarity House Cooperative is to create content, and help others create content, for the promotion of cooperative economics, law, policy and culture. We have initially created three separate podcasts, between which we will produce 8-10 new episodes every month.

Solidarity House: Besides interviewing advocates and activists from all over, we also let the audience into the house to hear about our restoration, governance, and commune-building efforts, our day to day life in an intentional community, and our music! Pilot episode is here and on Podbean.

Cowboys on the Commons: In-depth interviews on cooperative law, economics, policy, and culture. Pilot episode will be released in four days and will be updated here.

Solidarity Wyoming: News and interviews about Wyoming politics and culture. This isn’t your parents’ Wyoming. Pilot episode is here and on Podbean.

We emphasize cooperative economics, law, policy, and culture, through research- and interview-based content. We produce and record original music, and have the capacity to produce podcasts for other organizations and individuals (I have been doing this on contract for three different organizations over the past three years), and seek collaborative relationships with other cooperative content producers and organizations.

There are many ways to support Solidarity Collective, but the easiest and most mutually beneficial way is to subscribe to Solidarity House on Patreon for $5.00 or more per month. Subscriptions directly support the restoration of the house and land and its conversion into an egalitarian ecovillage whose facilities will be available to all cooperative activists regardless of what personal resources people have.

For those wanting to take a deeper dive into support for our group, mission, and principles, Yana Ludwig offers courses and workshops on many of the principles that guide us: conflict resolution, guerrilla consensus, cooperative economics and culture (I lend a hand with the classism stuff), and starting an intentional community. Both in-person and, in some form, remote options exist for these workshops, so if you’re interested, contact Yana, who’s been doing this stuff for a long time. Her book Together Resilient: Building Community in the Age of Climate Disruption was the Communal Studies Association’s 2017 Book of the Year and is available here.

Please consider this my personal ask. Producing, and helping others produce, content promoting cooperative policy and culture is my life work. When I’m not doing it, I don’t feel right. When I am doing it, I can work all day with a smile on my face. My job is to help show that humans can share their stuff, take care of one another, and take care of the earth. After several years of doing this work for other organizations, I think I’ve found a way to turn it into a democratically-owned enterprise, and support many people’s work. I would love your help!

This post is also a call for interested people to send us inquiries about membership in Solidarity Collective and residency on our communal land. The easiest way to connect with us to that end is to join our Facebook group, but if you don’t Facebook, we are still pretty easy to find.

Beyond all that, this post heralds the news that we are landed, active, and unstoppable. It’s time to create an alternative system in the middle of a place that desperately needs one. We’re here and we’re doing it.

Don’t Make Demands on Wage Workers

by Matt
July 27, 2018

So the other day I was having lunch at a restaurant and the service wasn’t good. Non-attentive, took a long time, never asked how I was doing or whether I needed anything. So do you know what I did?

. . . Nothing.

I didn’t stiff the tip. We shouldn’t even have tipping. It encourages harassment and dehumanizes service workers. But as long as it’s a thing, I’ll tip what I can afford regardless of the service.

I didn’t complain to management. That could have gotten a young person in trouble or fired and who knows what effect that might have on their safety or security? Reporting a wage worker to their boss is pretty much like calling the cops on your noisy neighbors. Don’t do it.

Confront the server? Why? If they were occupied with other parts of their job because it was busy there, how would that do anything but make them feel bad? If they were just resting or daydreaming, well good. Wage work is terrible. I have no problem buying them 5 minutes of freedom.

In this world of hierarchy and exploitation, sermons about the “value of hard work” or the “decline of good service workers” are not sensitive to the political and economic realities of our time. My only regret is that I didn’t leave my server a pamphlet about organizing their workplace. Next time.

Don’t discipline wage workers, folks.

Rhetoric, Materiality, and Pants

May 25, 2018

When you point out to orthodox Marxists that they engage in analyzable rhetorical strategies, they act like you’ve just peeped into their living rooms where they’re walking around without pants.

When you point out to non-materialist rhetorical scholars that the artifacts and situations they analyze are grounded in materiality, they act like you’ve just suggested they remove their pants and walk down a crowded street in broad daylight.

(Just an observation by Matt.)

Matt’s Public Banking Series at Occupy.com

by matt on May 14, 2018

Occupy.com is publishing my ten-part series on public banking, “the good, the bad, and the ugly” of the movement, as I told editor Mike Levitin. Here are Part OnePart TwoPart ThreePart Four, and Part Five, which was just published today.

Main themes: Public banks are tools, not ends in themselves. It matters how we message them. Thus far, technocratic and even conspiratorial rhetoric has dominated the contemporary movement, although historically, successful public bank advocates (the Non-Partisan League in North Dakota, the Quakers, and even the medieval clergy, have been motivated by strong visions of economic justice. Money, debt, interest, sovereignty–these are all ways of describing material relationships. The foremost question of political economy, and the most important policy question in creating a just banking system, is to co-create and meet needs in sustainable ways. Public banking is an important step on that journey. Again, it matters how we issue all the demands and create all the things.

Part Three is a little bonus story-within-the-story: How a whole lot of California public banking and cannabis activists, and a small organization (Commonomics USA) helped evolve the State Treasurer’s Cannabis Banking Working Group into a test case of arguments for and against public banking–and ultimately a proponent of the paradigm. This was a big deal in my mind, because John Chiang began his leadership of the Working Group by saying its goal was to provide to the cannabis industry the same private banking service other industries get, and has wrapped it up by calling for the exploration of a public banking system that would run across the state’s gargantuan economy while staring the DOJ in the face. That’s some evolution. It’s hopeful stuff.

If you’re interested in all of this and have stuff to say, let’s think about getting some discussions on a podcast–yours, someone else’s, mine, whatever. And, as you might imagine, these ten articles gotta be compiled after the series, so look for whatever package that ends up becoming.

Mug Shots and Bankruptcy Proceedings

May 11, 2018
Matt Stannard

The other day I stumbled upon this example of the practice of publishing people’s bankruptcy proceedings. Declare bankruptcy at the U.S. Bankruptcy Court in Spokane, and the Tri-City Herald will publish your name, address, total debts, and total assets.

They’re a matter of public record, of course, but one’s conscience asks why such painful information needs to be publicized in this way (if there are public policy-oriented reasons for disseminating bankruptcy information, surely there are better ways to do it), even as one’s legal mind may understand the theoretical reasoning: Bankruptcy is the public legal forgiveness of debt.

But as I cited in a recent public banking article over at Occupy, debt itself is a political and sociological invention.

In his 2011 book Debt: The First 5000 Years, anthropologist David Graeber chronicles the transition from communal systems of sharing – including shared obligations – to capitalism’s assimilation of all relationships into a system that generates profits for investors. Integral to that process is the individuation (and demonization) of debt, one of the many relationships that are stripped away, often through literal violence.

 

In addition to Graeber, in that article I also cite Linda Coco, a law professor and innovative legal clinician concerned with how debt and financial distress damage us. I learned about Professor Coco’s work when I read her 2016 article on bankruptcy as discipline in the Wyoming Law Review. Concerned with how bankruptcy court procedures construct and reinforce a narrative of fiscal failure, Coco concludes:

The bankruptcy petition codes [petitioner’s] financial life according to a legal and procedural logic found in the bankruptcy legal world . . . [their] financial lives and their identities are properly rendered into a recognizable pattern. Their information is fixed within the grid of the schedules and organized over time in the Statement of Financial Affairs. Their financial life is organized and controlled. It becomes legible in two-dimensional space. It is clearly analyzed and rendered for and in the bankruptcy process . . . a normalizing force in American social and cultural life. The internalization by disciplinary techniques of these dominant discourses results in the collective doxa of a group in which “more and more people must attune their conduct to that of others, the web of actions must be organized more and more strictly and accurately, if each individual action is to fill its social function. Individuals are compelled to regulate their conduct in an increasingly differentiated, more even and more stable manner.’  Therefore, discourses of economic utility and individual responsibility create the standards by which individuals compare themselves to each other, the manner in which individuals distinguish themselves, the way that individuals rank and measure each other, generate ideas of good and bad, and ultimately decide what is normal and abnormal behavior. The social group views individuals experiencing over-indebtedness and financial distress as aberrant. Financial failures are people who have not mastered the requirements of economic productivity and utility. According to the economic utility models, individuals experiencing financial difficulty are believed to be unable to exercise restraint and self-control.

Professor Coco’s article is a profound exposition of an insidious ideological machine. Another law professor, similarly concerned, is Mehrsa Baradaran, whose recent prolific work effort proposes that we create supportive, rather than adversarial, relationships with our financial structures. For Baradaran, this reformation includes a more authentic and class-conscious interpretation of the Bank Holding Company Act’s public benefits requirement, and the creation of postal banks with a mandate to provide credit and liquidity to the economically marginalized.

Those would be relatively modest reforms, if we’re being honest with ourselves. But conventional American economic thinking sees such proposals as pretty much Fully Automated Luxury Gay Space Communism. If such a reconciliation of Americans’ material vulnerability with the building of democratized and compassionate financial utilities is difficult to conceive in the present moment, one reason for this is the not just the ritualized discipline of financial failure, but also its ritualized spectacle. These newspaper bankruptcy notices are a manifestation of that spectacle. They are like, although perhaps not completely like, “mugshots” magazines available for sale (because people buy them) in gas station convenience stores across the Midwest.

“Of all capitalism’s tricks,” I wrote in the Occupy article, “the trickiest is convincing people that debt, credit and currency have an objective existence and power beyond what we give them.” Marching debtors out naked onto the public stage while their debts and assets are called out as dry, existing things is one way to reinforce that topos.

Featured image: Philip Nicholas Bankruptcy Proceeding, signed by John Quincy Adams as Commissioner.

200 Red Balloons

He seems older to me.

Whatever else you want to say about Karl Marx (and there’s a lot to say, he doesn’t actually seem like someone I’d have wanted to be friends with), he had a profound, unprecedented critical sensitivity:

    • he possessed an empathy with the excluded periphery of the material and political world,
    • he was capable of finding the classist metaphysical assumptions, the cruel theology, in conventional assumptions about economics, and
    • he spotted, with precision, the ways in which symbolic, legalistic, institutional reforms failed to address the underlying problems they set out to reform.

Materiality always seems to have the last word, even though materialists have a mixed record on understanding oppression holistically. But you can’t get oppression without understanding how wealth, the generation of wealth, differences in wealth, control of systems of production large and small, contextualize it.

While I won’t defend those who insist that economics always comes first, it seems like the more pressing challenge always is convincing people it comes at all. There is a great material interest in obfuscating materiality.

Just search “Marx at 200” today and you’ll find many interesting reads, but a few that stand out are Andrew Hartman’s “Marx at 200: Just Getting Started” and Nigel Gibson on “why the workers’ way of knowing still matters.” Gibson writes:

In his last years, after the Paris Commune of 1871 when working people rose up against the capitalist state, he became interested in alternative paths to socialism. In his Ethnological Notebooks compiled in 1881, he critically read ethnographers, praising the freedom that the Native American Iroquois women had compared to women in “civilized” societies. It was live human beings and their reason that remained essential – not the mechanical materialism that Marxism is often reduced to. Marx was a revolutionary humanist, open to – and inspired by – the new passions and forces that spring up and open new avenues to a truly human society.

But he was also a materialist, and I think we have to be both and more.

matt

 

Guns, Public Spaces, and the Arming of the Commons

by Matt Stannard
March 31, 2018

How should those concerned with economic justice orient ourselves to the discussion about school shootings and the availability of firearms? Many vocal revolutionary lefties have taken the position that “if the cops and white supremacists have guns, we need them too,” and although I don’t necessarily disagree with the principle of revolutionary self-defense (and support oppressed groups defending themselves by whatever means they think necessary), I think it’s important to reflect on the kind of world we are trying to build, as well as the way gun proliferation manifests itself in the capitalist political economy.

Public conversations about safety and security are not exactly self-conscious of their own kierarchic biases; think of how the silly “free range parenting” debate ignores the condition of communities of color, for whom there are often no “free ranges” where children are not in danger of being harassed or murdered by police. Likewise with the debate about whether to allow lethal weapons into public spaces. Liberals will ignore how gun laws hurt oppressed communities. Conservatives will ignore how the weapons industry and the myth of the armed white savior celebrate racist violence against those same communities. I also agree that all laws, including the regulation of firearms, fall harder and more capriciously on people of color—and are often constructed with that very aim. So I’m not looking to extend the hand of a deeply corrupt (even if occasionally redemptive) state onto those communities. At any rate, I’d prefer to debilitate or eliminate the private arms industry rather than punish individuals for possessing guns.

The reason my wrath is reserved for the arms industry is that they make a hell of a lot of cash while lobbying for the wholesale saturation of public and private spaces with guns. Gun lobbyists want guns to be an intrinsic facet of the very structures of everyday life. Besides being an overwhelmingly lethal vision of life, the arming of the Commons is contemporaneous with the privatization, the enclosure, of the Commons. Spaces ruled by the constant threat of lethal violence can be neither free nor cooperative. In the privatize-and-arm paradigm (for the forces behind privatization are absolutely allied with the agenda of the NRA and gun universalists), each affluent home is a well-armed fortress, less-affluent homes depend on the good graces of the wealthier classes (for whom they work anyway), businesses are all lethally armed, able not only to eliminate individual, pathologically disaffected worker-assailants, but also to intimidate workers from collective actions like strikes or slowdowns. In a world where no spaces are unarmed, and people cannot exist in mutual vulnerability, there are no truly public spaces.

Like privatized public spaces, armed public spaces substitute physical force for mutual deliberation, making hierarchies inevitable and participatory governance impossible. So it’s especially disturbing that advocacy of firearm security is focused on turning the “soft targets” of public schools (an especially vulnerable and valuable part of the Commons) into “hard targets.” The construction of the fearful student, the existentially insecure youth, is a fast track to the commodification of life. By defining the lack-of-firearm as a condition of insecurity, we invite the incursion of a warrior class into our already materially overdetermined class relations. All of this makes sense against a backdrop of creeping incipient fascism and neoliberal privatization economics. “Whether wielded by heavily armed police, mass shooters or right-wingers,” Sean Larson writes, “the sheer volume of guns in the U.S. serves to militarize underlying social conflicts.”

That political economy of weaponization is manifest across many current points of the gun debate. So when the White House and Department of Justice promise to aid in the training of armed teachers, they will undoubtedly award firearm training contracts to for-profit gun school cronies. A cluster of banks with proven records of racism and/or criminality–Bank of America, Deutsche Bank, Wells Fargo, JPMorgan Chase, Fifth Third Bank–are providing financial support to arms corporation Remington, as it slogs through bankruptcy. Other banks have refused to do so, citing public perception and general decency. Conservative lawmakers, put off by insurance companies’ risk market-based reluctance to insure schools where teachers carry firearms, are considering forcing those companies to provide the insurance, an irony several layers deep. Here in Wyoming, gun manufacturing businesses prop up a piece of the state’s conventional economy, and business groups welcome the prospect of new gun manufacturers setting up shop in the Cowboy State.

All of this is part and parcel of an economy based on extraction and exploitation. Citing Pamela Haig and Richard Hofstadter, Sean Larson’s amazing article traces the gun market to the desperation of arms manufacturers when wars end. It begins immediately after the Civil War, when

major gun manufacturers were faced with a dilemma: how to create a civilian gun market when the major demand from the military had fallen off sharply . . . in the 1870s, Winchester advertised its Model 66 as useful for “Indian, Bear or Buffalo hunting.” These early links between gun sales and imperial expansion, however, were nothing compared to the cultural campaigns launched a few decades later . . . During the [First World] war, contracts for the U.S. and allied militaries drastically expanded gun production facilities. But planners were already anticipating the postwar problem of, as Haag puts it, “too many guns and too much capacity for too little demand.” Looking ahead to an era of mass production and diminishing practical need for guns, sales and marketing teams set out to construct and reinforce an ideal gun consumer . . . gun manufacturers took the opportunity to monetize racism and fears of radicalism by advertising “riot guns” to business owners looking to protect their shops from “disturbances, either racial or political,” and promoting their firearms as the only surefire way to protect the “industrial life of the nation.” Such overt efforts to militarize existing class conflicts were part and parcel of a broader plan that Winchester called “the biggest and most carefully planned national advertising campaign ever undertaken by any firm of gun makers in the world.”

And so has it continued and evolved.

It’s impossible for me not to see the entire conversation around the Marjorie Stoneman Douglas High School shootings, and the rash of similar shootings, through this lens of capitalism, privatization, enclosure, and militarization. Thinking about how the warrior culture is embedded in materially hierarchical societies, I think about how the gunman, Nikolas Cruz, was a member of the Army Junior Reserve Officer Training Corps program, as were some of his victims. That program’s Parkland-based marksmanship team was partially funded by the National Rifle Association, meaning that gun lobbyists essentially helped train the assailant and wish also to help train those who try and deter or kill future assailants. I can’t even view stories about the non-responsive, seemingly paralyzed sheriff’s deputies who didn’t even try to stop Nikolas Cruz, without wondering whether they were deadened to the danger of the lethality of Cruz’s weapon, or aware of that danger to the point of being terrified, even as LEOs. There are no good decisions in lethalized spaces, and a society wishing to incentivize good decisionmaking should not saturate such spaces with deadly weapons.

Illustration: The Gun Factory, by Joseph Pennell – Online Collection of Brooklyn Museum; Photo: Brooklyn Museum, Public Domain

On Banking, Heitkamp Forgets Where She Lives

by Matt Stannard
March 14, 2018

Elizabeth Warren is in a bloody fight with the handful of Democrats who support new GOP legislation to roll back Dodd-Frank requirements on banks. The new legislation loosens regulations for smaller “community” banks, but also for the biggest, too-big-to-fail, often criminal banks at the top of finance capital’s food chain. One of the Democrats joining the GOP in that rollback effort is North Dakota’s Heidi Heitkamp, who said of Warren on this matter, “She doesn’t live where I live.”

But Heitkamp lives in the state with the country’s only public, state-owned bank, the Bank of North Dakota. And although she told The Atlantic‘s Russell Berman a sob story about “Democrats [watching] as smaller banks and lenders in their states have been eaten up by larger institutions, due in part to the added burden of regulations created by Dodd-Frank,” there are a couple of half-truths at play here, and Heitkamp should know better.

First, Dodd-Frank has been little more than an exacerbating factor on what was already a steep decline in community bank viability. As J.V. Rizzi wrote in American Banker a few years ago:

There are many things to dislike about the Dodd-Frank Act. Causing the demise of community banks, however, is not one of them . . .  the number of community banks with assets under $100 million dropped from 13,000 in 1995 to 2,625 in 2010–before Dodd-Frank was enacted. The number of small community banks had dropped under 1,900 by 2014.

Second, and even more to the point of why Heitkamp’s position is so weird: the Bank of North Dakota has kept community banks alive in that state through financial support for community bank loans, and regulatory compliance support. The results have been astounding if one compares North Dakota’s community banking scene to the rest of the country. I once explained why in a blog post I wrote for the Public Banking Institute:

Public banks offer unique benefits to community banks, including collateralization of deposits, protection from poaching of customers by big banks, the creation of more successful deals, and . . . regulatory compliance. The Bank of North Dakota, the nation’s only public bank, directly supports community banks and enables them to meet regulatory requirements such as asset to loan ratios and deposit to loan ratios. . . . [I]t keeps community banks solvent in other ways, lessening the impact of regulatory compliance on banks’ bottom lines.
We know from FDIC data in 2009 that North Dakota had almost 16 banks per 100,000 people, the most in the country. A more important figure, however, is community banks’ loan averages per capita, which was $12,000 in North Dakota, compared to only $3,000 nationally. . . . During the last decade, banks in North Dakota with less than $1 billion in assets have averaged a stunning 434 percent more small business lending than the national average.

Stacy Mitchell reached a similar conclusion:

With 89 small and mid-sized community banks and 38 credit unions, North Dakota has six times as many locally owned financial institutions per person as the rest of the nation. And these local banks and credit unions control a resounding 83 percent of deposits in the state — more than twice the 30 percent market share that small and mid-sized financial institutions have nationally.

And so did Ellen Brown, who provides some background on how BND was mandated to help with compliance:

In order to help rural lenders with regulatory compliance, in 2011 the BND was directed by the state legislature to get into the rural home mortgage origination business. Rural banks that saw only three to five mortgages a year could not shoulder the regulatory burden, leading to business lost to out-of-state banks. After a successful pilot program, SB 2064, establishing the Mortgage Origination Program, was signed by North Dakota’s governor on April 3, 2013. It states that the BND may establish a residential mortgage loan program under which the Bank may originate residential mortgages if private sector mortgage loan services are not reasonably available. Under this program a local financial institution or credit union may assist the Bank in taking a loan application, gathering required documents, ordering required legal documents, and maintaining contact with the borrower.

So Heitkamp’s invocation of North Dakota is curious. I can’t say I’m surprised though: BND has saved conservative North Dakota’s financial ass countless times, but state officials and electeds hate acknowledging this–in fact, they almost never do in mainstream contexts.

Warren’s criticism of the new Senate bill is sound. The bill ultimately exempts all but only the top 12 banks in the country from regulations and stress tests. The worst thing Warren is guilty of in this instance is believing (or acting as if she believes) that for-profit banking can be saved at all. We can have that debate another time (I personally believe capitalism makes the consolidation or death of small banks inevitable without massive state intervention). But Heidi Heitkamp’s omission of her own state’s success in propping up an otherwise anemic community bank industry is, to use current parlance, sad.

Matt Stannard writes on cooperative economics, law, and sustainable farming. He was policy director at Commonomics USA and a board member of the Public Banking Institute.

Activists Urge California Public Bank Not Limit to Cannabis Revenue

Grassroots public banking activists respond to CA Treasurer’s Request for Information

by Matt Stannard
March 3, 2018

Commonomics USA (the organization I used to be policy director for, and for which I still serve as a consultant), along with public banking advocacy groups from Los Angeles, Santa Cruz, San Jose, Oakland, San Francisco, Santa Rosa, and Eureka, California, have written a response to California Treasury Secretary John Chiang’s Request for Information concerning a public bank in California, which was written after a year’s worth of public hearings on California’s cannabis banking problem.

That RFI (an RFI is a standard business and governmental procedure made prior to undertaking large projects) was released in late January. But there was a problem with it: It did not reflect the public demand that sparked it. And, given the final direction and gestures of the Working Group, that was a surprise and disappointment.

It should be noted (I’m presently working on a longer piece telling this story) that the public banking movement overwhelmed, and fundamentally changed the focus of, what was initially a reluctant Cannabis Banking Working Group. In early sessions of the CBWG hearings, Chiang went out of his way to instruct participants not to advocate for public banks in general; early scholars invited to the San Diego session insisted public banks were not feasible, and the Working Group was even, at times, jovially dismissive of the idea.

But everywhere the CBWG went, members of the public, during the open comment periods, insisted not only that the Working Group consider a public bank for cannabis revenue, but that it consider a public bank categorically. While Chiang continued to insist that comments be limited to the problem of banking cannabis revenue, members of the public ignored that limit and advocated for the general benefits of public banking.

Chiang’s eventual response was impressive: Rather than further scolding members of the public, the Working Group announced a previously unscheduled hearing in Los Angeles devoted exclusively to the question of public banks, and further, that such a discussion should not be limited to cannabis revenue, but be inclusive of general arguments for and against public banking.

I continue to admire Chiang for that piece of brave leadership (among the privileged, public banking is still seen as a fringe movement, even after New Jersey’s new governor, Phil Murphy, campaigned on creating one in that state). Chiang could have taken a safer way out. Many of us are glad he didn’t.

Nevertheless, the Working Group’s RFI does limit itself to “studying the various administrative and operational structures for organizing a public bank or state-backed financial institution to serve the cannabis industry.” And this has raised the ire of the many groups across California demanding divestment from big private banks and the embrace of a radically democratic model of public finance (more radically democratic, even, than anticipated by the rather conservative, fossil fuel-supporting, pro-police state Bank of North Dakota).

The letter in response, linked below, argues that the best way to envision a public cannabis bank is by envisioning a public bank that is not limited to cannabis:

We invite you to share our vision: a network of public banks (intrastate municipal/regional banks and interstate state banks) that provides a distinct alternative to depositing public monies into Wall Street banks, reflects California’s environmental priorities and social values, and becomes California’s legacy for future generations.
Public banking, at its core, is a shift in the state’s role from mainly providing bank regulatory oversight to also providing banking services, thereby addressing commercial banking market failures. Public banking shares the original ambitions of the postal service, delivering mail to every household, and the rural electrification program, electrifying all of rural America. In our envisioned network, each public bank will provide banking services to its defined community – filling gaps where the market has failed to fully provide affordable deposit, credit, and other investment services. State banks would provide low-cost (probably internet-based) deposit services to large segments of the unbanked population and create pools of credit for large infrastructure projects, affordable housing, and student loans. Municipal and regional banks would focus on developing the small business lending and local investment market; developing financially-responsible alternatives to predatory financial schemes, such as bail bonds and payday lending; and financing local infrastructure projects, including renewable energy and disaster recovery.
The failure of the market is profound and more widespread than is commonly understood. The lack of banking services for the cannabis industry is only one example of this failure. Over 20% of California households are un/underbanked, as documented in 2015 by the FDIC. And, given the ongoing disaster recovery efforts in northern and southern California, the lack of immediate and affordable credit for municipal governments as these communities struggle to rebuild after the fires and floods is a clear shortcoming of the market. Unfunded infrastructure, unfunded new Community Choice Energy organizations, and unfunded affordable housing for public service workers can be financed through a state or municipal public bank. Finally, the state’s revenue shortfall and liquidity crisis during the Great Recession, made worse by the refusal of banks to honor the state-issued IOUs, is another critical example of the need for credit. Without a broader vision, this particular public bank effort by your office may be perceived as exclusive or discriminatory. Such a perception so early on in the public bank feasibility process may be cause for otherwise avoidable resistance from both the public and the Federal Reserve, which may view a public bank “dedicated entirely, or predominantly, to the cannabis industry” as concentrated deposit risk. Moreover, since the Federal Reserve is tasked with addressing financial inclusion, it may be receptive to an expanded definition of financial inclusion based upon a critical analysis of the market failures of the commercial banking system.

While the letter includes specific suggestions that will be helpful to the cannabis industry (such as automated retail cannabis payments), its larger message is that a whole-state, economic and ecological justice approach to public banking is advantageous for the limited policy objective of cannabis banking, because more stakeholders will sign on, and even because the Federal Reserve will be more likely to entertain giving a Master Account Number to a broadly-mandated bank than a narrow one whose only purpose is to circumvent (or, to put it more charitably, make up for the gaps in) federal law. Thus, the response letter suggests “conduct[ing] an ‘intersection’ study throughout state government and its agencies that identifies the specific state social, economic, and environmental policy objectives that a public bank can achieve.”

The letter may be downloaded here:
030218 Letter in Response to RFI