Robert Stark, “The Stark Truth: Interview with Marc Armstrong” (Voice of Reason, 7 May 2012)
With recent public anger at the behaviour of large private banks over the last 30 years across the world, it’s time to revisit the idea of publicly owned banks that accept deposits and lend money purely to fund the production of goods and services. In Australia, all major banks are now privately owned and only the central bank, the Reserve Bank of Australia, is owned by the Australian government. In the United States, there is one publicly owned bank, the Bank of North Dakota, which funds public infrastructure projects in a state that has experienced rapid economic growth and has the lowest employment rate in a country where most states have struggling economies and many people out of work. In this episode, journalist Robert Stark interviews Marc Armstrong of the Public Banking Institute which advocates the creation of public banks at state and community level and holds the Bank of North Dakota as an ideal to emulate. The interview can be found at this link.
Armstrong makes a very strong case for public banks as major agents that stimulate investment and activity in an economy suffering downturns and credit crunches, and which moderate economic growth and prevent over-heating in the form of runaway inflation and a “two-speed” economy aka Dutch Elm disease in which some booming industries encourage capital flight away from other industries which then slump, affecting jobs and employment and other industries that depend on them. Throughout the interview Armstrong points out how public banks help economies climb out of recession, empower small businesses, create flexibility and adaptability in an economy and devolve power away from centralised institutions and give it back to communities. He points out that China has a central public bank that serves the people and finances major infrastructure projects.
The Bank of North Dakota gets considerable attention as the US’s only major public bank and Armstrong notes that it is 100% state-owned. He talks about the history of the BND, how it was founded by farmers and the fact that the bank has so far been able to keep out-of-state corporations away from North Dakota’s agricultural industries. He notes that North Dakota has always had a strongly populist tradition and that the idea of public banking is not a “leftist” or socialist idea as some people to think but, on the contrary, has a strong libertarian appeal in that it enables communities to regain control of their money supply and use it in ways that benefit their members. Indeed, he notes that the US Constitution provides support for having public banks as creating money and regulating its value is a sovereign task of US Congress and such activity is best done through a people’s bank.
Stark asks intelligent questions from the viewpoint of Californians as he lives in the state itself and, at the time of the episode’s broadcast, the California State Assembly currently had AB2500 before it, this bill being a proposal to reintroduce public banking in the Golden Gate state. Armstrong answers questions clearly and well: the man not only knows what’s there to know about public banking, he is a Very Big Believer in the worth of public banking. At the end of the interview, Stark asks Armstrong to plug his organisation, the Public Banking Institute, and Armstrong runs through a list of activities and symposia being held to promote public banks.
This is a very important interview for all Americans and for others living in countries where public banks either don’t exist or used to exist and where private banks are held in contempt due to a history of exploitation based on debt. In case listeners are not convinced of the claims Armstrong makes for public banks or miss much of the interview – it is very involved and people must be able to follow the medium-fast flow of conversation – they can always visit the Public Banking Institute’s website or attend any activities and symposia hosted by the organisation.