Author: cowboysonthecommons

ICE, Detention Centers, and the Commons

(matt)

Despite the threat sanctuary cities are under, I wish I lived in one. I wish I could support public officials who, politically at least, see noncitizens (whatever their immigration status) and citizens as equally worthy of moral consideration, as equal stakeholders in the community. Wyoming is lucky enough to have a few public officials who see both documented and undocumented residents of the state as part of their community family, but the odds, unsurprisingly, are not in our favor.

Wyoming’s ruling class, its cattle and mineral and real estate interests, often exhibits a uniquely and sometimes brutally indifferent attitude towards disadvantaged people. And although Wyoming has always had a significant Latinix community, it hasn’t been easy for them.

Comes now Management and Training Corporation, an allegedly terrible Utah company, to build an ICE detention facility in Evanston, the Wyoming border town an hour from Salt Lake City. Andrew Graham of the ever-important and brilliant WyoFile, described developments as of last October:

Both Evanston’s city council and Uinta County’s commission unanimously passed resolutions in June to support the Management Training Corporation’s plan to build and manage an Immigration and Customs Enforcement detention center just outside Evanston city limits. The jail would have the capacity to hold 500 undocumented immigrants detained by ICE while they await court hearings in Salt Lake City.
Uinta officials are uncertain whether they need Wyoming’s five statewide elected officials to approve the project. It is possible a jail holding immigration detainees does not require the same level of approval as other forms of private prisons regulated under Wyoming law, a county official said. Either way, MTC’s efforts to jail immigration detainees from throughout the northern rockies in Uinta County have thus far gone largely without notice in the state at large.

Except they didn’t go unnoticed for long. More on that in a minute, but first more about MTC, which has come under scrutiny for a number of problems that ought to raise red flags in the minds of the public: corrupt officials, riots, prison breaks, sexual abuse by officers, alleged human rights violations, and a number of other charges ranging from concerning to embarassing to horrifying. If even some of these charges are true, that raises serious public policy concerns. MTC also deploys prison labor and I was told by people I trust in this subject matter that it was very likely ICE will utilize detainee labor –practically unpaid–at the facility it wants in Wyoming. I’ve written articles and talked about this before. Extracting surplus value from the labor of the incarcerated is an especially insidious and destructive form of bio-political control.

MTC knows it’s in trouble. Fortunately, ICE is having problems of its own (notwithstanding the Trump administration’s mandate for ICE to behave like literal stormtroopers). Evanston, Wyoming–in Uinta County–is a chance for both corporation and goon squad to do right. Finding willing jurisdictions for building detention centers has been challenging. The hope is that Wyoming, immersed in a downward trajectory of economic insecurity, and highly supportive of unhinged border nationalist Donald Trump, will be a willing partner.

But there’s fierce resistance (partly due to Wyofile‘s coverage) and it’s growing throughout the state. Thanks to groups like Juntos, the ACLU, and the Equality State Policy Center (and many other organizations, churches, groups, and individuals, an organized effort is underway to pursue numerous political, legal, and social pressure-oriented means (check out #WyoSayNo) of stopping the project. I’m helping.

I’m not just helping because immigrants are human beings, detainees are human beings, and we’re all potential aliens and detainees (that’s all true though). I’m helping because our vision of the Commons, of community, and of cooperativism will not work alongside a regime of regulating human movement based on violence. If we are to “regulate” migration, let us do so democratically and cooperatively. That’s the spirit of the Commons appropriate to the tens of thousands of years of cultures migrating, traveling cyclically, escaping bad things and journeying to better places, together. Welcoming the stranger, giving the outsider the head seat at our table, is a recognition of our universal dependence on the Commons. If we have to regulate the way and where we move, we need different criteria, and different voices, in place to exist with and honor how and why we travel across, out of, and into shared spaces.

More later on this, here at C on the C, and elsewhere.

Photo credit: aljazeera.com
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7 Reasons Your Economic Insecurity Isn’t Your Fault

. . . and why that matters

by Matt Stannard
January 29, 2018

The sobering assessment at the end of 2017 by Philip Alston, the UN’s special rapporteur on extreme poverty and human rights, concerning the 40+ million Americans living in poverty, left a question unasked: Why have there been so few effective grassroots political revolts against inequality and material deprivation in the United States?

The seeming lack of class consciousness is even more surprising when we consider that economic insecurity doesn’t just affect those below the poverty level: over 215 million Americans–which I count as 66 percent of the population–couldn’t cover a $1000 emergency with the money in their savings account. That’s over five times as many of us who technically live in poverty, and it suggests that economic insecurity is now an intrinsic feature of the American identity.

This knowledge alone, that there are well over 200 million people just like us, should help temper the feeling of failure that Americans tend to feel about their economic insecurity. But the cultural and rhetorical forces of capitalism are strong. The billionaire class invests a lot in teaching us that our material insecurity is our fault. That unique capitalist apologia has an illustrious history.

Such shaming, along with the condition of economic insecurity itself, extracts terrible tolls on our health, and makes us less effective in fighting the underlying socioeconomic and political conditions responsible for the difficult conditions so many of us are in. The shame of economic insecurity demoralizes and weakens us and makes it less likely we will join in struggle with others against unfair economic conditions.

So I actually hope that if you are economically insecure–whether in poverty or swimming a few days above it, as you read this short article, your shoulders will feel less tense, you’ll breathe more deeply, and let go of the guilt that the oligarchs and moralists want you to carry. Then, I hope you’ll find the strength and love to become more resolute in your determination to help create a world without this kind of abuse, and with the opportunities that come from egalitarian, cooperative security–the kind of world that, frankly, the majority of the world wants and has always wanted.

Here goes: This is a meditation. Your economic insecurity is not your fault because:

1. . . . wages aren’t under your control

Wages haven’t kept up with productivity gains or inflation over the last several decades. The work you are doing now could very likely have been enough, on its own, to support you and a few others, and own a house and car. Even low-income work could sustain a decent apartment. None of that is true anymore. The elites have many reasons for wanting to keep wages low in most sectors of the economy, including protection of their profits, but other reasons too. I’ll just let Richard Wolff explain it:

Capitalist enterprises keep moving their operations (first manufacturing, now also many services) from high to low-wage regions of the world to raise their profits. Departing capitalists leave their former host communities with unemployment and all its social costs. Such conditions force desperate competition for jobs that drives down wages and guts job benefits. Public services decline as government budgets suffer. Capitalism no longer delivers a rising standard of living in the regions where it began and developed first: Western Europe, North America and Japan. Instead of goods, capitalism delivers the bads.

Wages suck, the wage economy is designed to suck for most of us, and none of that is your fault.

2. . . . capitalism is like a roller coaster

Our economic system is subject to periodic crises. During those crises, people who’ve been “doing the right thing” all their lives are often ruined. A haunting Wikipedia page, “List of economic crises,” traces economic crisis from first century Rome to the present. The crises proliferate over time, with one crisis in the 14th century (it was a banking crisis), eight in the 18th century (including the Bengel Bubble Crash and the collapse of French enterprise on the Mississippi) to twenty five in the 20th century. Every economic crisis devastates countless lives and re-boots generational economics. Those devastated lives are then dehumanized further by public discourse blaming working class and poor people for the state of the economy.

3. . . . capitalism reproduces itself in social relations

Although pointing this out makes postmodernists cringe, it’s not unreasonable to conclude that the way a society produces and distributes its goods, and the patterns of mass scarcity that may result from inequality, influence the way we interact with each other vis. institutions and cultural behavior. We can debate about how much, but it seems to me that economic determinism is more true the poorer or more insecure you are, which is another way of saying that scarcity “overdetermines” the cultural expression of economic relations.

A description of the important anthology Millennial Capitalism and the Culture of Neoliberalism lists those various relational themes:

how the triumph of the free market obscures rising tides of violence and cultures of exclusion, and the growth of new forms of identity politics. The collection also investigates the tendency of neoliberal capitalism to produce a world of increasing differences in wealth, environmental catastrophes, heightened flows of people and value across space and time, moral panics and social impossibilities, bitter generational antagonisms and gender conflicts, invisible class distinction, and “pariah” forms of economic activity.

4. . . . a few powerful entities could make the system work for us all but won’t do it

Although pointing this out makes revolutionary socialists cringe, a few basic reforms –far from the new paradigms of ownership cooperativists ultimately advocate — could solve many, if not all, current manifestations of economic insecurity. A reasonable regime of taxes on capital and the recovery of the trillions of dollars hidden in tax havens could eliminate the effects of poverty and economic insecurity, if not the root causes. All that would take is a tiny group of Americans deciding to end their intransigence on just taxation–but we all know this is unrealistic.

But please tell us more about how our inability to rent one-bedroom apartments in Denver and San Francisco is our fault.

5. . . . “money” is a construct

The increasing realization among scholars and activists that “fiat currency is a social construct” could not have come at a better time. Economist James Galbraith calls the axioms of Modern Monetary Theory “factually uncontroversial.” Governments choose to order and symbolize their financial endorsements the way they do. Both governments and banks create what can be called money, and the real questions are how to manage that process, how to incentivize social goods and ameliorate social bads and deal with other actors, like workers, businesses, and consumers. As Atossa Araxia Abrahamian explains:

The decisions about how to issue, lend, and spend money come down to politics, values, and convention, whether the goal is reducing inequality or boosting entrepreneurship. Inflation, MMT’s proponents contend, can be controlled through taxation, and only becomes a problem at full employment—and we’re a long way off from that, particularly if we include people who have given up looking for jobs or aren’t working as much as they’d like to among the officially “unemployed.”

Irrespective of what money “is” in either a metaphysical or practical sense, the value of your money is not under your control. When our parents accused us of “not knowing the value of a dollar,” they were more correct than they knew.

6. . . . “work” is a construct

I remember sitting with activists at a community center in Detroit in a snowy January in 2014, talking about their revolutionary approach to inner-city unemployment. The reemergent phrasing was that there’s no jobs but plenty of work. This truth has been pointed out all over the country. Anyone looking around immediately sees things to do–things that would improve life for everybody, things that could make the planet happier, busy work, dirty work, dignified work. Under our current wage-based paradigm, “jobs” are what private shareholders want to extract from us to increase their profits, and whatever public and nonprofit work can be painfully extracted from these powerful interests. As our crumbling infrastructure and shrinking social service networks testify, there’s plenty of genuinely valuable work not being done.

Moreover, a “work week,” a reasonable number of hours to work in a day, the way differently-abled and differently-privileged people are capable of arranging their work lives? You guessed it: all arbitrary and a function of what economic elites want the extraction of your labor power to look like. For this caprice and myth of order, we’ve been shamed for our inability to always do the kind of work they want us to do.

7. . . . “personal responsibility” is a construct

Even if personal responsibility exists, a person can incur neither credit nor blame for endowments they possess or lack. Even if you can trace your financial mistakes–a job you fucked up, a bad marriage, a criminal record, these mistakes fall differently on different people. The late John Rawls caused a stir among philosophers of “moral desert” when, in A Theory of Justice, he argued that people cannot claim moral credit for their natural endowments and tendencies. Sure, Rawls argued, people can expect to get paid well for doing good work, but that doesn’t mean we deserve or do not deserve good things in a general sense based on what we’re good or not good at.

People resist this because they think personal responsibility is important. But, like the foundational assumptions of MMT, the assumptions of Rawls’ dismissal of moral desert are perfectly reasonable, and their consequences are dependent upon what we do with the understandings we have of our moral, material, and political agency. The real question isn’t whether you are genuinely or absolutely culpable for your individual economic condition (have I mentioned you aren’t?), but what we can do, acting together, to achieve real moral agency, which is control over our material lives.

The think tanks and spokespeople deeply invested in making you feel guilty for not having enough money to live are also deeply invested in systems of production and finance that ensure it will stay that way. As we stop feeling guilty, we’ll find new layers of energy with which to defeat and bypass them.

Should you hold yourself accountable for bad choices you made when you know you can “do better?” Sure, if you think it will help you do better. I’m not suggesting you shouldn’t. But we’re all part of a larger set of systems. We’re smart enough to understand that responsibility is dialectical. It’s just that we’ve been pushed so far in the direction of absolute moral desert that we are, per Kenneth Burke, “rotten with perfection.” We should try forgiving ourselves and each other and moving forward together to overthrow the existing economic order.

Matt Stannard is a legal and policy advocate for sustainable farming and cooperative economics.

Image: The Panic – Run on the Fourth National Bank, No. 20 Nassau Street. Illus. in: Frank Leslie’s Illustrated Newspaper, 1873 Oct. 4, p. 67.

Walter Wangerin Jr.’s The Book of the Dun Cow and Imagining Contemporary Evil

Matt Stannard
Jan. 21, 2018

This afternoon, after several months of periodic readings, my kids and I finished Walter Wangerin Jr.’s The Book of the Dun Cow. I had, with only minimal resistance, proposed to read it out loud to my teen, tween, and ten year-old, in partial recognition of having read the Great Brain series, Alice’s Adventures in Wonderland, The Wonderful Wizard of Oz, Sadako and the Thousand Paper Cranes, and a few others to them when they were much younger. Those were sweet days.

I’d rediscovered, or spontaneously remembered, Wangerin’s epic novel, that some have called a “Lord of the Rings with Farm Animals” (although Wangerin’s prose is far more pleasing to read out loud than Tolkien’s, in my opinion), decades after first finding it when I was about 13, reviewed in an issue of Dragon magazine. I enjoyed the book then and learned a lot about the form of the Christian allegory in literature from it. Some might try to call it a “Christian Animal Farm,” and that would be clever but not really accurate. Orwell’s novel was really, really cynical compared to Wangerin’s story of a basically innocent, decent, somewhat emotionally immature rooster being charged by God, through the whispering voice of the Dun Cow, to fend off an attack from the manifest evil coming from a coop and farm far away, and created by a giant devil-worm that lives deep in the earth.

And it is unapologetically Christian, although it’s a Christianity that admits to and celebrates doubt, doesn’t promise happiness to believers, and invests even the simplest characters with a lot of personal autonomy–at least in terms of letting each farm animal set their own route to fighting the great evil that threatens the farm. There are no humans in the book, but there is a chicken coop and hints of other artifacts, presumably implying some now-distant human intelligence. But it’s the animals who are entrusted with defeating the evil animal-gods and demigods put before them.

It’s the nature of that evil, though, that inspired me to read the book with the kiddos this time around. Some of it is chaotic evil, to put it in RPG terms: the evil rooster demigod, the mirror-image of the hero rooster except much more physically powerful and able to create millions of tiny poisonous snakes with its vomit or something, reminds me of both wannabe and real Nazi trolls today, with their performative brutality, their deliberate use of low-grade irony, and simple self-declared mission to destroy all who aren’t them. Some of the book’s evil is lawful evil, a giant wyrm in the earth who believes its very presence and size entitles it to rule and who tries to seduce the hero with promises of power before opting to try and destroy anything that opposes it (that’s what the billionaires do–first they try to buy you and then if they can’t they must silence you at whatever cost).

I’m aware that these are Christian images too, and I don’t know anything about Walter Wangerin’s politics, but if he is an orthodox Christian, his politics are probably pretty different from mine. But I also have to say that my concerns with the alt-right and the billionaire class are more than just “political” in a conventional sense. The important thing is that Wangerin knows that the violent exercise of asymmetrical power and dishonest manipulation of good people are bad things, and his animation of them produces beautifully hideous and revolting villains that, like the heroes in the book, are essentially cartoon characters, but not shallow caricatures. That takes some skill and aesthetic vision.

So as I read the book to the kids a couple of hours at a time over a period of months (I can’t quite remember when we started), I wanted to speak the voices of good, imperfect beings fighting back against others who either wanted to eradicate them for existing (the gratuitous racist violence that’s irreducible to just wealth acquisition), and those who would seek to manipulate or destroy others for the sake of economic gain. These are the twin evils, I think, represented by a large part of the current political order and culture. But my hope is they’d get something more than just politics out of hearing a story about how good, imperfect, mistake-making beings hold their own against those who want to exploit or destroy them.

There are two more books in Wangerin’s Dun Cow series. If you’ve read them, I’d love to hear what you think. I told the kids (who enjoyed the book and admitted on their own they miss sitting around hearing me read to them, I swear) that if any of them wanted to read the other books I’d buy them. I think I’m good with just this one, but that doesn’t mean it wasn’t beautiful in every way–the incredible wordsmithing, the very deep and emotional development of the characters–and, where it was a tiny bit traditional-gender-roles, easily bracketed and deconstructed (at least I felt so, but obviously could be wrong. Christianity is what it is, unless Wangerin were UCC, which as an M.Div from the Lutheran Christ Seminary-Seminex, I will guess he’s not).

But I want to thank him for doing a very good job representing bravery amid moral frailty, destructive and manipulative evil, depression and self-loathing, vulnerability and forgiveness, even the ineffable tragedy of losing family members, all in a fantasy novel about rooster warriors and farm animal armies.

The drawing above is by Abby, and was inspired by the book. 

The Right to Fear

by Cate Morrison

An astonishing thing happened in Rhode Island last Thursday morning.

I will piece together the complicated timeline to the best of my ability, mostly on the basis of the Providence Journal reporting.

9:00 am: Donald Morgan is being transported to a court appearance for vehicle theft by a state trooper, when the trooper stops to assist a car crash. While handcuffed but unsecured, Morgan gets into the driver’s seat of the police cruiser and drives away. The cruiser is located by GPS and found abandoned. According to an eyewitness, 40-50 police officers descend on the scene.

(roughly) 10:30 am: A call goes out over police radio to be on the lookout for a “white Ford F150” with “something hanging out the back.” A Cranston police officer assumes the truck must have something to do with Morgan. He then sees a white Ford F250 “driving erratically,” and pulls the driver over. The driver stops, but then drives on. The Cranston officer loses sight of the truck.

At some point, so far unclear, Providence police officers spot the truck entering I-95 north at the Providence Place Mall. What follows is an astonishing show of force.

There are unofficial estimates of 30-40 marked and unmarked vehicles that converge on the truck. Bystanders said the police officers themselves were driving in ways that would endanger the public.

Penned in by police vehicles, the driver attempts to first reverse and then go forward—though from videos, it is unclear if the lurch and drive forward is intentional or if Joseph Santos has already been shot dead with his foot on the pedal. Officers open fire on the truck’s cabin. Driver Joseph Santos is killed. Passenger Christine Demers is critically wounded. At this point, 5 Providence police officers and an unspecified number of state troopers all opened fire at some point at Santos and Demers.

They had nothing to do with Donald Morgan. They were unarmed.

Five officers were involved in the shooting, according to police officials. Estimates from bystander videos suggest 40 rounds fired.

When I first heard the story, my first mordant thought was “how soon will the victims’ arrest records be released?” The answer was a bit over 24 hours. The ProJo online headline announced “Police Identify Two Shot Thursday on Highway On-Ramp.” The identification was solely legal—the lead: “Both Joseph J. Santos, 32 and Christine E. Demers, 37, who remains hospitalized, had extensive involvement with law enforcement and the courts.” The following texts struggles to substantiate the claim. The records were revealed for the sake of shaming the victims, but they told of a far more disturbing pattern of human suffering at the hands of the law—where small infractions, petty arrests and add-on charges snowballed into more and more time, warrants and infractions, and struggles with addiction became criminalized. These were no great dangers to society, and given the number of officers responding, were also not threats to specific members of the public at the time. The chase was officer-initiated, sustained and heightened.

Aristotle, in his account of the emotions, comes to a very uncomfortable conclusion about the connection between individual and social feeling. Some people have rights to emotional responses that others do not. Deprived of a social standing that could be threatened, the slave cannot feel anger. Daniel Gross explains it as an economy of emotion, where social collectives invest concern in some and not others, and a system of not rationality but reason. There are reasons to be hopeful, angry or afraid, and to feel kindness, shame or admiration. Before even the word, emotional response expresses a rough system of judgment. One is worthy of pity, another indignation, some feared, others admired—this tells us about the originating reason of the world before it is laundered into more genial types of justification. My reaction tells me about what I am before I even know what I think. If I’m angry, you cut me down without cause. If I’m afraid, you can, want to and will cause me harm. If I am kind, I want to help you for no benefit to myself when you need it.

There is a caveat. The emotions are social. Some people have the right to feel. Others don’t.

What did Joseph Santos do to die, and Christine Demers to be gravely wounded? At most, Santos drove badly and Demers did nothing. They panicked after an initial stop for driving a white Ford truck, triggered by a fallacious state-wide bulletin. They then had police from several different towns and jurisdictions swoop down on

The enabling conditions of fear are a presumption that a) someone or something has the ability to hurt you, b) that it wants to or is going to hurt you, c) that it is close by and thus can hurt you. Santos and Demers both knew about the ability for the law to hurt them. They knew that they were being pursued with sudden, unexplainable and overwhelming force. They found themselves surrounded by this force without any way to understand why, when even bystanders were astonished. They were right to be afraid, to act in ways that are extreme and unreasonable, but their actions became instead justification for their nearly inevitable deaths once the horrible machinery began moving.

We know that the reaction of fear is deemed generally socially acceptable, because one of the most common responses to officer-involved shooting is that they feared for their lives or for those of members of the public, and thus deviated from standard practice.

Fear, however, is granted to some and not others. Santos and Demers were not allowed to fear. They weren’t given the benefit of the doubt.

What happens to members of public who fear for their lives? Why do they have no right to fear?

When police officer shootings occur, the feeling of fear is processed through its reasoning. The suspect was capable, willing and realistically in that situation able to hurt you. The specific Providence police were wound up and ready to fire on who they believed to be Donald Morgan. But Donald Morgan wasn’t there. It was two people with a history of petty crime, wrung through an uncompromising system, who got scared and tried to run when an unimaginable phalanx of police descended on them. Overwhelming force came down upon two people who had done nothing to deserve such a response.

They panicked. The officers did not. They killed with absolute control.

I thought that the body cameras and bystander films would show a scene of chaos and confusion. They did not. Officers cover the truck and systematically shoot into it, calmly and in formation. The videos show an execution.

We ask—how to process a mass shooting? How do we even comprehend a person shooting 26 in a church or 58 at a concert. We have a far greater vocabulary, though, for a single person shooting dozens of people than we do multiple people shooting 40 times at two unarmed people, whose greatest crime was panicking. What do we say then?

Cate Morrison is senior lecturer and director of debate at the University of Rhode Island.

Photo credit: ABC news, from bodycam footage.

Sears CEO Eddie Lampert F***ed Up & My Friend Paid for It

by Matt

Over at Occupy.com, you’ll find my new essay on the fallout from Sears’ financial debacles (the result, among other things, of Lampert’s decision to do stock buybacks instead of, umm, maintain and repair the physical stores where people were actually showing up to buy things). It’s a personal essay, because my friend, a married father of several young’uns, is now unemployed because of Lampert’s bungling. It’s also an essay about morality. And that’s been on my mind for the last several months: the way that it’s really impossible to have a coherent normative or prescriptive moral theory when one’s practical moral culpability is inversely proportional to the amount of money one has. So give it a read and a share, okay? And I’d love to hear your own thoughts on the way class differences fuck up our ethics.

A Quick Q&A: Phil Murphy & Public Banking

by Matt Stannard

Q: Phil Murphy campaigned for New Jersey Governor –and won– on a public banking platform. What’s a public bank?

A public bank is a state- or city- (or other government entity) owned bank. The bank typically takes as its deposits the revenue or holdings of that government entity (such as taxes). The bank then lends to various entities and can do so at low- or no-interest, in order to finance public goods.

The only significant public bank in the U.S. now is the Bank of North Dakota. BND is one of the most powerful and solvent banks in the country, and it makes low-interest loans to the state for infrastructure; to municipalities to build schools and repair things; to farmers; to students (it supports student loans and offers good refinancing options); and to small businesses. BND supports community banks in North Dakota, and because of it, the state enjoys the healthiest small banking sector in the country.

There are public banks, or strong public banking sectors overall, in other countries like Germany and Costa Rica. Germany’s public bank has helped finance that country’s cutting-edge post-carbon energy transition.

A public bank has been a central piece of Murphy’s economic agenda, rather than just some idea he’s casually mentioned. He’s a believer, which puts him in a small list of good company that includes Bernie Sanders.

Q: Why do public banks have such potential?

Banks, whether private or public, have the power to create value through fractional reserve lending. Although it’s somewhat misleading to straight up say banks “create money out of nothing,” they sort of do that: If I borrow $10,000 from my local bank, it’s not like they go downstairs to their vault and bring out $10K in cash to give me. They essentially create $10K in credit. I pay them back with interest. That’s how they make money.

The theory behind public banking is: “Banks have a lot of power to generate public value. That power should be treated as a public utility, not just a private business.” Private banks have to make profits to satisfy their shareholders. Public banks make a (small) profit too, but that surplus can be paid back into the state or city coffers, essentially creating dividends for residents, all the while lending in the public interest.

Public banks keep communities financially healthy in hard times because their economic benefits run “countercyclical,” lending at low interest when private banks won’t lend even at high interest.

Public banks also help break state and local governments’ dependence on risky Wall Street finance. Had a public bank been in place in New Jersey starting around twenty five years ago, it could have helped the state save over a billion dollars on pension fund fees alone.

Q: But I thought Murphy had been a Goldman Sachs executive. Wouldn’t Goldman Sachs hate public banks?

I wrote about this question a year ago when Murphy announced his candidacy, in an article entitled “In Praise of Class Traitors.” I interviewed my former colleague at the Public Banking Institute, Ellen Brown, who speculated that a person from the financial sector might be exactly the kind of politician with the credibility to push a public bank. “Our biggest hurdle has always been that legislators don’t understand how banking works,” she told me. I also interviewed socialist economist Rick Wolff, who said Murphy probably “knows what shenanigans go on in big banks and investment houses like Goldman,” but that “as a Democrat, he cannot attack pensioners the way other, especially Republican governors have,” and that a public bank would, among other things, be “less politically costly” than letting pension plans burn.

Q: Why should we trust Murphy? Once a thief, always a thief, right?

I’ve already seen many of my friends on the left express skepticism about Murphy based on his banking pedigree. I get it. That skepticism is healthy. But Murphy is Governor of New Jersey now whether we think he should be or not, so let’s see what happens. He wouldn’t be the first person of privilege to facilitate egalitarian economic ideas. He wouldn’t even be the thousandth.

Q: How hard will it be for Murphy to actually establish a public bank in New Jersey?

There will certainly be a lot of hurdles to overcome. The legal hurdles will likely revolve around New Jersey’s constitutional prescription against the state “lending of credit.” But overcoming that hurdle will be relatively easy, Such provisions didn’t prevent North Dakota from running its own banks, and several other states (and Puerto Rico) have quasi-public infrastructure banks that offer loans and credit assistance to public and private sponsors of construction projects. After all, in the status quo, Governments deposit their revenues and invest their capital in private banks. Those banks, in turn, lend money–but they aren’t “lending the state’s credit.” The banks lend their own credit, which is distinct from the “credit of the state.” This distinction may seem complicated, but it’s good enough for the courts. Throughout the 19th century and in reference to the Bank of North Dakota in the 20th century, courts have agreed with states’ efforts to have public banks lend money instead of private banks.

The larger hurdle will be political–and this is where the public banking movement often flounders. Opposition from the private banking sector will be fierce. Wall Street will lie, steal, and cheat to discourage public officials from opening public banks.

What will be needed is a mass movement of people in New Jersey willing to write letters, make phone calls, and physically show up to demonstrations in favor of Murphy’s efforts (assuming Murphy goes forward with a public bank). It’s not like there will be many counter-demonstrators. But public officials are risk-averse, and there will be rich people in suits telling them not to do it.

In other words: Public banking is a good idea, but being a good idea is not enough. It’s not even enough, in an age of Wall Street hegemony, to be the Governor of New Jersey and push for a public bank. You need lots and lots of ordinary citizens willing to keep issuing the demand loudly and clearly.

Q: Where else are people pushing for public banks?

All over the place! City governments, spurred on by local economic justice coalitions, are exploring public banking all across California. Santa Fe, New Mexico is in its third stage of policy study on implementing a public bank. There are vocal movements and sympathetic public officials in Washington, Oregon, Hawaii, New York, Illinois, Pennsylvania, New Hampshire, Maine, and at least a dozen other states. Whether they succeed or not will depend on whether they have behind them large coalitions of people willing to push past the resistance they’ll encounter from big banking interests.

Q: Will a public bank usher in an era of egalitarian, socially responsible, progressive economic policies?

This is a good question–and the answer is another reason why public banking requires a mass movement in order to work effectively. Public banks in and of themselves are not a guarantee of good economic policy, and are especially not a guarantee of economic justice. For all the positive aspects of the Bank of North Dakota (disaster relief, support for farming, building schools and community centers on the cheap, supporting local business development), that conservative state has used its socialist bank to do things like finance fracking and a toxic oil economy. The BND even financed police repression at Standing Rock last year through its emergency financing program–probably the most depressing and hurtful use of public financing we’ve seen in a long, long time.

The lesson here is that public banks are tools, and whether a tool is used to build good or evil things depends on who wields it. But in the hands of a democratic government committed to transparency, ecological sustainability, and socioeconomic justice, a public bank can do incredible good.

Matt Stannard is a legal and policy advocate for sustainable farming and cooperative economics. He previously served on the board of directors of the Public Banking Institute and was policy director for Commonomics USA.

Brief Note on Exploitation and Abuse

We all have needs and lacks, some because of the system, some because we’re hardwired to have them, some because of trauma, some just because of ordinary life experiences. There are healthy ways to take care of these needs, account for and address (or resign oneself to) the lacks, generally to function and meet needs in a healthy way. It’s clear that most of us don’t know how to do that in every instance and many of us don’t know in any instance. We are constantly damaging, exploiting, and abusing one another, and we do damage to others commensurate with our position in social and economic hierarchies.

When we abuse, harass, or exploit, we’re using other beings to fulfill those needs without behaving requisitely ethical–without their consent, or without just compensation, or without considering their needs and wants, or without repairing or restoring what we have taken.

This causes great damage. Sexual abuse and harassment ruins people, families, communities. Economic exploitation ruins people, communities, regions.  Ecological exploitation ruins communities, regions, the planet. Each form feeds from and to other forms, so that being sexually abused messes up your economic life, ecological destruction creates scarcity that makes economic and sexual exploitation more likely, economic exploitation reproduces itself in cultural norms like hypermasculine competitiveness, and so on.

Each of these forms of abuse and exploitation is unique and requires commitment to unique processes to address it. But there are common forms to the processes required to address all of them. Each requires (1) a personal commitment to do what we can to address them; (2) an understanding of how we–I, personally, and we, collectively, are part of the problem and necessary for the solution; (3) concrete materialization of abuse- and exploitation-free culture and structures.

Cooperativism, whether economic, cultural, political, or in all manifestations, has to begin with that commitment, because what we’re really addressing is that dynamic of exploitation and abuse, patterns which cut across everyone and everything in a world of hierarchies.

~matt

 

Resisting Prison Labor

by Matt

Black Agenda Report: “Prisoner rights advocates will converge for what aims to be the largest abolitionist demonstration in U.S. history, [Saturday, August 19], in Washington D.C. The Millions for Prisoners’ Human Rights March is centered around the demand that the exceptions clause, which allows for slavery to continue in United States prisons, be removed from the Constitution’s 13th Amendment.”

Since we’re in a period of heightened consciousness about slavery and its legacies, this is an especially important time to talk about compulsory prison labor, or, more bluntly, prison slavery; enslavement of incarcerated people.

I have no desire to break down the components of the moral case against slavery, but must at least partially do so to point out how enslavement of the incarcerated is an especially nefarious kind of human exploitation.

Labor produces value. Prisoners’ compulsory–or even very-low-paid–labor facilitates the production of value for privileged entities (the state, private corporations who get in on the action) and extracts that value, working the body and mind of people at their most vulnerable. Not even the weak justification for the wage system (people are free to walk away and find other work, live in other labor communities) is present in the context of incarceration. I believe this all amounts to something foundationally evil and unjust, which bypasses whatever moral judgment may fall on the prisoner. I’m betting most people reading this believe the same.

Nazism, the Confederacy, China’s authoritarian capitalism, all have slave labor as their material foundations (so does Classical Greece, but that’s another post). That’s the backdrop of Nazis in Charlottesville, and prison labor is another head of the Hydra.

The Black Agenda Report piece by Kyle Fraser summarizes the corporate and governmental profiteering that steers the prison labor ship, and is a good starting read. Last year’s Think Progress piece by Carimah Townes is a longer and more detailed read, definitely worth the time.

Confederate statues should be removed because they are non-living remnants of slavery. Prison labor, on the other hand, should be abolished because it’s a *living* remnant of slavery.

Photo By Royalbroil – Own work, CC BY-SA 3.0, at Wikimedia Commons

How Racism and Capitalism Work Together in Policing

by Matt Stannard

Municipal and state police forces’ use of intimidating and lethal superweapons is a result of the private, for-profit production of such weapons and accompanying lobbying to create policing policies that favor those weapons. But that production and distribution couldn’t work except over a backdrop of anti-Blackness, and the ability of police ideologists to interpret disadvantaged neighborhoods and the trauma of historical oppression as Black criminality.

Racism and capitalism work together in tandem again in the training of police officers by private training firms with the same material interests as the weapons makers. The fastest way to turn police forces into consumers of those weapons is to teach cops that they need to be very, very afraid of people of color. The obvious solutions are to take control of the situation and eliminate any threat to the safety of the officer as quickly as possible. This imperative, propped up in the consciousness of police officers even if they aren’t overtly racist, must be constantly replenished.

Matt Stannard is policy director for Commonomics USA. 

Photo: By Daviskorn at English Wikipedia – Fed Up Queers, Public Domain

A Stakeholders’ Case for Public Banking and a Public Cannabis Bank in California

by Matt Stannard and Marc Armstrong
Commonomics USA
Presented to Cannabis Banking Working Group, Los Angeles, California, August 10, 2017

As our organization, Commonomics USA, is concerned with policies that prioritize the commons, we talk a lot about stakeholders. Stakeholders are also an appropriate place to start in this meeting, because neither a Cannabis Banking Working Group nor a special session on public banking would exist but for strong public demands: for a policy of legal recreational cannabis, for financial protection and security for the MRB industry, and, as we’re seeing throughout California, for public banks.

 

 

When viewed from the lens of stakeholder needs, the question becomes what banking system creates security, predictability, opportunity, and sustainability for the primary stakeholders in California’s transition to a new cannabis economy. Those stakeholders are (1) California residents, who voted to regulate rather than prohibit recreational cannabis, but want to be free of crimes, including financial crimes, associated with marijuana-related finance and commerce; and (2), California marijuana-related businesses, of whom many cities are paying special attention to businesses emerging from communities historically victimized by the war on drugs.  In Commonomics USA’s experience, publicly-owned and maintained systems often do a better job meeting those particular needs–security, predictability, opportunity, and sustainability–than privately-owned systems, for the greatest number of stakeholders, and especially for disadvantaged stakeholders.

California needs a solution to the cannabis banking conundrum by January 2018. As statements to the Working Group have established, private banks are reluctant to “touch” cannabis money absent a prior “first touch” by the State of California. Although it is unclear whether the federal Department of Justice has the resources or political capital to hinder commerce in states that have legalized recreational cannabis, and experts have told this Working Group that the Cole Memorandum and FinCEN guidelines might “prove to be more resilient” than many suppose, federal prohibition is vexing, particularly with respect to financial transactions for MRB money, and especially against the backdrop of a DOJ led by a vocal critic of recreational marijuana.

The legal and policy context for these problems is ambiguous and unpredictable. The federal government has not explicitly asserted that states cannot set different controlled substance schedules and policies. As legal scholars have pointed out, certain provisions of the CSA seem to anticipate this. Moreover, the United States Supreme Court declined to hear an objection to state-level legalization from other states. Meanwhile, the state of California collects taxes and fees from California MRBs now and will continue to do so no matter how this Working Group answers the banking questions. The federal government, through the Department of Justice and Department of Treasury, has not seriously questioned the tax and fee revenue from California MRBs and there has not been a distinction between tax and fee revenues from medical and recreational cannabis .

This raises interesting philosophical questions: When the state government touches that money, what is the legal basis for it being clean enough to be deposited in a bank? Is the state compromising its fiduciary responsibilities by assuming that these monies are not at risk of seizure? Is mixing tax receipts between different industries merely perpetuating the obfuscation and lack of transparency of an underground economy? We ask these questions because we believe that the legal basis for the state’s ability to legitimize cannabis money needs to be built and made explicit.The federal government has jurisdiction over interstate commerce, but California needs to develop the legal and policy framework for in-state commerce of a product that is federally illegal and, in the case of recreational cannabis, potentially the target of federal hostility. A public bank solution will allow California the opportunity to express the first iteration of the terms of any such answer–by asking the administration and the Federal Reserve banks whether the policy objectives of federal financial crimes and drug laundering laws favor a centralized state bank in the driver’s seat, or a continuation of the decentralized, ad hoc, and often surreptitious practices of cash collection and quirky experiments by small private banks.

Rather than looking at this as a cannabis problem, this is really a banking problem–a problem of the inability/unwillingness of the private banking sector to address both a segment of the population and a pressing social need. That’s a familiar situation for those of us in the banking and public policy world–particularly those of us interested in public banks. In fact, as California stands at the precipice of a cannabis banking crises, it is also immersed in two other banking crises, slow-burning problems that hurt the state’s communities and its economy. The first is the economic toll that big private banks have taken on the state. California’s state and local treasuries have suffered greatly under the interest rates and fees charged by big banks, the costs of financing infrastructure and development, and the reluctance of private finance to fund the kinds of development Californians need. Capital appreciation bonds saddling school districts with interest charges that dwarf the size of the principle are probably the most egregious, but the results are the same: costly public financing, lack of access to financing for public sector goods, and a cynical sense that we can no longer afford to fund good ideas.

The second banking crisis is the unavailability of basic banking services to so many Californians. According to the 2015 FDIC National Survey of Unbanked and Underbanked Households, almost 900,000 residents of the state lack basic banking services, and thousands more — over 19% of households — are “underbanked,” meaning they subsist financially with short-term and very expensive services. Lack of access to affordable services contributes to financial precariousness and insecurity, which is harmful to the individuals, families, and communities affected, and a barrier to sustainable economic security across the state.

So privately owned banks seem to trip over a number of market failures, of which cannabis revenue is one. The reasons may be different–in the case of cannabis revenue, a heavy-handed federal government–but the common denominator is that the tendency to view banking as merely a business opportunity rather than a public utility has meant and will continue to mean that huge populations are unserved, and huge public needs unmet.

But the State of California stands in a unique position to take on these challenges. California is the sixth largest economy in the world. Policy-wise, it has pushed itself ahead of the federal government and much of the rest of the nation on policies from post-carbon energy to family leave, from struggling to forge a universal health insurance system to protecting immigrant communities. New government-owned, nonprofit JPAs are being formed to produce renewable energy. One might say California is forging a new economy. We think a new economy needs a new bank–a bank of its very own, that leverages the power of banking based on deliberative policy objectives rather than using profit and loss as a starting point for financial policymaking.

After studying public banks and public banking campaigns for many years, and listening intently to the discussions in these Cannabis Banking Working Group meetings, as well as several divestment and public banking meetings across the state, we offer this four-stage proposal as a starting point for discussion.

The first phase would be the drafting and legislative enabling of a public bank: The Department of Business Oversight would define a Public Bank Charter for a depository bank serving the unmet banking needs of the California public. California’s legislature would pass the enabling laws to support and protect this bank license. In this phase, the state would develop a business plan as part of its application to the Federal Reserve Bank of San Francisco for a master account number. We believe that this phase can begin immediately and, as a matter of fiduciary responsibility, would lower the risk of the subsequent phases. Should the Federal Reserve Bank of San Francisco grant the master account to this public bank without a fight, the landscape dramatically changes.

The first phase also includes capitalization. Many possibilities exist for capitalizing the bank, including debt or equity financing, issuing corporate bond and pension funds with the cannabis industry or the general public stepping forward to participate; or even constrained common stock in the fashion of the ownership of the Green Bay Packers.

In the second phase, the state bank creates depository services for MRBs and the unbanked and underbanked. Limited commercial account services could include demand deposit account services, cash concentration services, depository reporting, and automated payroll deposits for employees. Core, low-cost, retail banking services for the un- and under-banked market could include simple transactional and savings accounts, automated payroll deposit, peer-to-peer money transfer, international remittances, and debit cards. Low-cost methods used to access bank accounts could include online devices, existing ATM/Kiosks, and mobile phones.

In the third phase, the bank develops its capacity for risk management, compliance automation, and payment automation. The objective would be to lower the cost of compliance by using analytics and monitoring software to provide important reports using automated procedures and monitoring products. This Working Group has already heard about these capabilities from other participants. These products will provide greater transparency to the financial system. These participants have also mentioned payment automation capabilities, and we recommend that this phase includes this important technology. This can be done with an app that would complete payment transactions between cannabis consumers and cannabis businesses with an account at the public bank. If necessary or desirable, it could avoid the VISA, MasterCard and American Express network and transfer funds from the buyer’s California bank account to the seller’s account in the public bank.

In the fourth phase, the bank provides credit, lowering the cost of public financing, using public credit instead of taxpayer money or municipal bonds for the construction of schools, toll bridges, water and sewer systems, and a sustainable post-carbon energy system. Many additional public goods require financing and have huge social and economic payoffs, from affordable housing loan programs (including loans directed to public employees), that help people live in the same communities where they work, to loans for cooperative startups. The bank could also use its public credit to provide lower costs to wage earners saddled with student loan debt, helping a demographic that has, by many measures, gotten a raw deal in California.

There are four main benefits that a public bank can provide:

  1. Satisfies unmet market needs. In the event of market failures, when private banks are not able to meet the needs of the banking market, a public bank is able to be used to fill in the gaps, to provide deposit account and credit services where there are none.
  2. Cost savings. A public bank has a lower cost of doing business (no bonuses, no extreme salaries, no dividends, etc.) that can be passed on to borrowers, whether students, businesses or municipalities.
  3. Economic sovereignty. A public bank is a democratic approach to public finance, involving both the public and other stakeholders in the loan portfolio decisions.
  4. Counter Cyclicality. A public bank’s equity is not publicly traded on a stock market and is not subject to the same changes in valuation in as rapid a pace as we saw in 2008 and 2009 stock market, where some banks lost upwards to 80% of their equity. Because of this, public banks have the ability to continue to make loans precisely when private banks are terminating lines of credit, ending loan programs, and not accepting deposits.

Some folks, including a public official or two, are tired of public banking advocates bringing up the Bank of North Dakota. So we will only bring it up to explain that there are many roads to banking democracy This proposal, as presented, does not suggest transposing the BND model onto the State of California. It isn’t a proposal to use California’s assets to capitalize the Bank or to seek partnership with or underwriting of the private banking industry. In the wake of natural disasters, BND has the ability to make bridge loans to businesses and homeowners before they are reimbursed by FEMA and suspend mortgage and student loan monthly payments. In 2015, BND obtained more than $2.5 billion in public deposits through pledging services for private banks, in addition to providing $679 million of liquidity through BND’s secured and unsecured federal funds lines. Our proposal doesn’t preclude any of that, but it doesn’t require any of that.

The process outlined in our proposal should occur in tandem with the ongoing effort to relax federal law, consistent with the recommendations of Erwin Chemerinsky, Jolene Forman, Allen Hopper, and Sam Kamin, in their UCLA Law Review article “Cooperative Federalism and Marijuana Regulation.” Passage of the SAFE Act, a robust reaffirmation or strengthening of Cole-style and FinCEN guidelines, all as part of the ongoing effort to reach out to rational federal policymakers–who we believe really do outnumber the louder and less reasonable voices in Washington. California is likely to make that request to the federal government anyway. But doing so having created a public bank in the world’s sixth largest economy, a bank committed to financial oversight of cannabis banking as a matter of public policy, creates a very different context for the dialogue between the federal government and the states concerning cannabis.

Similarly, if it is to find any “banking”-based solution to MRB revenue’s federal illegality, California will inevitably have to face the question of obtaining a Master Account Number from the Federal Reserve Bank of San Francisco. Why not, then, have the State of California itself, on behalf of a state-owned bank with unprecedented control over the cannabis economy, make that application?

Most people in this room understand the general case for public utilities meeting unmet market needs and, specifically, public banking doing the same. As movements in Oakland, here in L.A., and in other parts of the state suggest, there is widespread support for exploring public banking in California. But the reason we’re having this conversation, here with the Cannabis Banking Working Group, is that this is a “try or die” moment for the cannabis banking question. Some entity or collection of entities must inevitably dialogue with the sources of current federal complications concerning cannabis banking. From a stakeholders’ perspective, we believe it makes a lot of sense for that entity to be the State of California–affirming the decisions the people of the state have made, owning those decisions.

This is a chess game, with economic sovereignty being the big win for California. Understanding the possible moves that the federal government can make is critical. We assume, for instance, that recreational cannabis tax revenue can be collected and placed in one of the state’s accounts in a private bank. What if, in the Attorney General’s quest to disallow recreational use of cannabis, this regulation is changed to disallow this recreational cannabis tax revenue from being legally deposited in private banks? California can collect the tax, but it’ll end up with the same banking issue now experienced by MRB’s. There will be yet another run on pickle barrels, only this time the state will be buying them.

What is needed is a body of state law that creates a Public Bank Charter (or license), defines “municipal affairs” for state charter cities, sets standards for in-state commerce of recreational cannabis, and protects Californians so that they may conduct safe economic transactions in the currency medium of choice.

A public bank can then be created in order to act as the organizational bulwark, protecting California’s interests by meeting unmet market needs and issuing deposit accounts to MRBs and the unbanked, efficiently handling the federally mandated compliance issues, automating payments (including tax payments), and making California’s economic sovereignty a reality.

A public bank acting as a necessary public utility that provides banking services to MRBs, to the unbanked and underbanked, and for lower cost infrastructure and commercial financing, can help California use its status as a global economic power, and its huge economies of scale, to create the appropriate financial infrastructure necessary for this undertaking. The decision to create such a bank as a solution to the cannabis conundrum would send an unprecedented signal to the world that California is stepping into a new cannabis economy and a banking economy that meets the needs of all Californians, businesses no matter the industry, and municipalities.

Matt Stannard is policy director of Commonomics USA. Marc Armstrong is president of Commonomics USA.