An Oregon state bank

Y es,it is socialism.

An Oregon state bank would require some new state employees and create building costs, but the benefits heavily outweigh the alternative of leaving it to the private sector.

I am by no means an economics expert. But after one look at a graph comparing North Dakota and Oregon’s unemployment rates, I had to ask what they were doing differently that allows them to have the lowest rate in the nation at 2.8 percent. I suggest that their answer lies in their unique state bank.

A bill backed by the Oregon Working Families Party will be introduced very soon. One can expect private banks to go against it full force, equipped with money and lobbyists.

After watching the movie “Inside Job” (2010), a documentary on the 2008 financial crisis, I came to the realization that we can’t trust the private sector to self-regulate. This is specifically the case in the financial industry, where the same people involved with every economic crisis since Reagan end up taking big personal gains and running the show at the Federal Reserve and other federal economics branches. That is to say, the very people that control the monetary system apparently head the major companies as well.

The academia involved may have also written your economic textbooks.

An article from the Associated Press [“Economy Prompts Fresh Look At ND’s Socialist Bank,” Feb. 16, 2010] on North Dakota’s bank, reveals that the general opinion of individuals who have worked with the state bank is that it wants to make deals with the people, not find ways to knock projects down. Although it is true that the Bank of North Dakota functions as a for-profit entity, money procured from loan interests goes into the state treasury, or micro-stimulus boosts to local, privately owned banks in credit crises. The article also points out that “during the last decade, the bank funneled almost $300 million in profits to North Dakota’s treasury.” They enjoy a state budget surplus, a rare thing nowadays.

Proponents of the upcoming bill For Oregon’s economic stability say that a state bank could be giving out credit to small businesses and farmers, both very important parts of Oregon’s economy—something that larger banks allegedly refuse to do. Another quality of the proposed system is the student loans that it would offer on the state level, potentially lowering interest rates. I have no conflict with this idea.

According to the Working Families Party’s website: “An Oregon state bank would not compete with local banks and credit unions, but instead would partner with them to ensure that Oregon’s money is put to work in Oregon.”

Some would call this simply another government meddling in the sacred business of the private sector, worrying that taxpayers would have to bail it out and that Oregon couldn’t pay for the increase of state employees. On the contrary, if built on a model similar to North Dakota’s, it would create quite the opposite effect of a much-needed state surplus. Although I do agree with and support free enterprise, there are some things that are better left to state management, and I trust the state of Oregon to do a better job at it than the federal government ever could.

True, not all of North Dakota’s economic stability can be contributed to its bank system, as even the president of the company will admit, but without shareholders, CEOs and fictitious money in the way, Oregon could have a place to pick up if the “too-big-to-fail” ideology about the United States is shown to be false.

Many loan practices are predatory, allowing people to take free boosts of money without being able to pay them back, which turned out to be the cornerstone of the housing bubble and burst in recent years. But the blame is not entirely on the people, for the practices of derivatives and purely speculative sales are what put the economy where it is now. ?