Publicly owned banks were instrumental in funding Germany’s “economic miracle” after the devastation of World War II. Although the German public banks have been targeted in the last decade for takedown by their private competitors, the model remains a viable alternative to the private profiteering being protested on Wall Street today.

One of the demands voiced by protesters in the Occupy Wall Street movement is for a “public option” in banking. What that means was explained by Dr. Michael Hudson, professor of economics at the University of Missouri in Kansas City, in an interview by Paul Jay of the Real News Network on October 6:

[T]he demand isn’t simply to make a public bank, but is to treat the banks generally as a public utility, just as you treat electric companies as a public utility…. Just as there was pressure for a public option in health care, there should be a public option in banking. There should be a government bank that offers credit card rates without punitive 30% interest rates, without penalties, without raising the rate if you don’t pay your electric bill. This is how America got strong in the 19th and early 20th century, by essentially having public infrastructure, just like you’d have roads and bridges…. The idea of public infrastructure was to lower the cost of living and to lower the cost of doing business.

We don’t hear much about a public banking option in the United States, but a number of countries already have a resilient public banking sector. A May 2010 article in The Economist noted that the strong and stable publicly owned banks of India, China and Brazil helped those countries weather the banking crisis afflicting most of the world in the last few years. Continue reading →

The US Census Bureau recently reported what most Americans already knew.  Poverty is deepening.  The gap between rich and poor is growing.  Slippage soon into the ranks of the poor now confronts tens of millions of Americans who long thought of themselves as securely “middle class.”

The reality is worse than the Census Bureau reports.  Consider that the Bureau’s poverty line in 2010 for a family of four was $22,314. 

Families of four making more than that were not counted as poor.  That poverty line works out to $15 per day per person for everything: food, clothing, housing, medical care, transportation, education, and so on.  If you have more than $15 per day per person in your household to pay for everything each person needs, the Bureau does not count you as part of this country’s poverty problem.

So the real number of US citizens living in poverty — more reasonably defined — is much larger today than the 46.2 million reported by the Census Bureau.  It is thus much higher than the 15.1 per cent of our people the Bureau sees as poor.  Conservatively estimated, about one in four Americans already lives in real poverty. Continue reading →