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State bank idea evolves

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Articles - March 2011
Wednesday, March 02, 2011
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0311_BankersGraph_02But opposition from bankers hasn’t stopped small-business owners from organizing. A coalition of 500 small-scale business owners and farmers led by Jim Houser of the Hawthorne Auto Clinic in Portland and Mark Kellenbeck of Cascade Management in Grants Pass has formed to promote the idea. Supporters have organized boisterous public hearings to make the case that a state bank would put taxpayer money to work for Oregonians.

Roughly 150 people attended one such forum in Northeast Portland on Feb. 1. Audience members voiced support for the idea and empathized with small-business owners and farmers denied loans due to their size. The prevailing themes of the speeches made by both the audience and panel were the pervasive lack of credit available to small-business owners and small farms, how to fund and structure a state bank, and why Oregon needs one.

“One of the things about the state bank is that it is not not-for-profit, but that the profit belongs to the people,” said Barbara Dudley, co-chair of the Oregon Working Families Party. Dudley told the crowd that the bank could not only provide money to businesses that need capital, but could also become a viable revenue source for the state.

To become a source of revenue rather than expense, the state would have to choose its loans carefully. Several major state loans have failed magnificently in recent years, such as the $20 million loan extended to the now-bankrupt Cascade Grain ethanol plant in Clatskanie.

One of the small businesses featured in the Main Street report is Allegri Wine Shop & Art Gallery in downtown Gresham, in a neighborhood that recently lost a bridal shop, a toy shop and a bike shop. Owner Bill Allegri says he has been unable to get a bank loan, so he’s had to refinance his home and reduce inventory. His original business plan called for hiring an employee to enable him and his wife Kathy to travel to wine regions and build relationships with winemakers to grow the business. Instead they have done “what needs to be done,” including going without health insurance. “Fortunately we have good health,” he says.
Allegri says he is not very familiar with the North Dakota model of a state bank, but he would support “any financial institution open to listening to small businesses to see how they could help them.”

Another supporter is Barbara McLean, who runs the One Stop Sustainability Shop in Northeast Portland with her daughter Jessica Ilalaole. They have struggled since launching in December 2009 with the goal of providing affordable everyday products to help people live more sustainable lives. Their shelves are stocked with dustpans made from recycled plastic, envelopes layered with old newspaper instead of bubble wrap and handmade soaps.

But it’s hard to pay the bills with idealism. After failing to get a loan through her credit union, McLean took out a home equity loan. She and her daughter moved from the pricey Pearl District to funky Alberta, where they’re hoping business will pick up as the weather warms. “We’d like to pay ourselves at some point,” says Ilalaole. Later in the interview, she mentions matter-of-factly that the shop’s unusual prices date back to the launching of the business, when “we didn’t know what we were doing.”
That offhand admission brings up an important point. Prior to opening his wine shop, Allegri worked for 25 years at a nonprofit. McLean’s previous work was doing fish surveys in the North Fork of the John Day River. Both followed their dreams to launch Main Street businesses, but their companies have not grown organically.

North Dakota’s Eric Hardmeyer says a state-run bank must avoid the temptation to loan to every business that needs cash with the hope that it will succeed. “You can’t save every deal,” he says. “You can’t save every town. Some deals you just have to walk away from.”

 



 

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James Chesky
0 #1 state bank idea evolvesJames Chesky 2011-03-13 22:12:22
Yes, it is time for a state bank of Oregon, A state bank of Washington, etc., etc., etc., 49 times over (since one of the 50 is already there).
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Robert Bows
0 #2 The usual disinformation from the private banks and their minionsRobert Bows 2011-03-28 17:34:27
Private banks and those who benefit from private control over our currency are certainly running scared, as more people discover the hoax that is being perpetrated on them.

So, in articles like this, they spread disinformation, begin with the charge that the Bank of North Dakota (BND) represents "socialism." If these folks would bother to read the Constitution of the U.S. and of many states, they would discover that currency and credit are SOVEREIGN functions, that is, requirements of governance, just like the postal service, the armed forces, etc. The use of the term socialism is just an ad hominem (name-calling) to scare people. In fact, what we have now is fascism--corpor ate control over the state.

It's important to understand that the "too big to fail" (TBTF) banks that were bailed out at the taxpayers expense own the Federal Reserve, that is, they control the money supply for the United States and charge us interest for doing so.

This is completely unnecessary, but they don't want you to know that. With this control, they determine when to contract and expand the supply of money to benefit themselves, which means stealing the fruits of our labor. It is just like the infamous financier Andrew Mellon said, "During a depression, assets return to their rightful owners." These folks believe that everything belongs to them and that they loan these things to us.

So, the current economic crisis (the 25th since 1890) is just one more robbery. The private banks are claiming that loans are available, but there aren't any folks with assets to collateralize to get the loan. Duh! They removed 40% of the money supply and kept the spigot off until massive numbers of people went broke, so these banks could foreclose on the assets.

As North Dakota exemplifies, a publicly owned bank behaves differently. Don't be fooled by the sophistry of the TBTF private banks and their minions. It's time to send them packing. As the community bankers of North Dakota will tell you, the BND not only helps them through participation, it doesn't steal their customers, like the TBTF banks. This is why there are more local banks per capita in North Dakota than in any state in the union.

For more, see www.publicbankinginstitute.org
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Jefferson Smith
0 #3 Credit UnionsJefferson Smith 2011-04-07 11:42:38
Credit unions are non-profit and accomplish exactly what the advocates of the state bank want (except without the additional power in the government's hands).
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