money moves the world and banking moves money welcome to the public bank solution conversations about an emerging new american institution a publicly owned partnership banks able to rebalance the scales of monetary control in service of the public interest and our common wealth brought to you by the public banking institute and its national association of partners and organizations hello and welcome to the public thanks solution i want to create terror emeritus of the public bank institute in their senior adviser welcoming you back to a discussion of how public banks are evolving and emerging in the american landscape of governmental management and executive decision making and also really the environment of finance and of our economy today we're going to be discussing and over writing and perhaps overbearing concern about how corporate control of our finances has taken away the power from the people to execute their own futures and  to having abrogated so much of the power to private interests the need for public ownership hard our guest is thomas hanna the director of research at the democritus mock received collaborative now for those of you don't know what democracy collaborative is that has been a very vibrant very important group that has been looking at current help how to change this system of our country of our culture and of our governments so that the economy could be more fair more robust and so that we can institute or should we create institutions that serve the public interest thomas wrote a an article that was published last in this september of this year called to stop the next financial crisis we need public ownership of banks now that's a great place for us to start he's also the author of a new book called our common wealth the return of public ownership in the united states that will be coming out  in the very near future but let's start with the consideration of what this next financial crisis which many people expect to occur why we need to be looking for alternatives to the one that to the solution if you subtext to this was the financial crisis of two thousand and eight and nine and it's not the as you point out in your report it's only one of about seven or eight since two thousand but that crisis made it difficult to argue the privately owned banks are more efficient when their activities nearly brought down the entire capitalist global economy let's tell us why how did that happen sure well i think it's important to start by saying that we're talking today you know basically on the ten year anniversary of that financial crisis of two thousand and two thousand and nine and from my perspective the that financial crisis was really an eye opener for many americans all of a of free markets was was born you know people were able to see that miss disappear before their eyes as the government had to step in and probably billions and billions of dollars of bailouts into the banking that your your book is talking about the return of public ownership in the united states what happened to public ownership of of our and public engagement with these institutions of finance and management yeah so i think the interesting thing in the united states is that we actually have a quite robust tradition of public ownership in this country because of the way the u s political system is structured we actually have the opportunity for different types of ownership a local level at the state level and at the federal level that doesn't exist in some other countries that have more centralized systems what we have seen in the past thirty or forty years is a change in the ideology of the united states sort of the rise of again that was never really true now that was a myth that was sold to the american people and to the people of the world despite the actual empirical evidence not having a lot of support for for that myth so in the book and in the report into that i've into this question of comparative the fisheries and you actually find that public banks can be as efficient as private banks public ownership in a variety of sectors traditionally historically in other countries has been incredibly if i understand it well the studies that have done around the world for public banks indicate that they there's a very stabilizing effect on economies that's that's a derivative of that element of why is that why is that stability and efficiency are driven into public environments as opposed to private ones well obviously there is a question of extraction of wealth for private would be group of shareholders and private industries and you know that goes hand in hand with financialization of our economy over the past several decades public ownership i think the most important thing for public ownership of banks for public ownership of any enterprise is that it gives you freedom of choice that gives you control over that entity in the banking sector that's especially important because this is the engine of most economists is finance the allocation of capital so having control over that allows you as a society to decide what you're going to prioritize where else in private banks in private industry and that those decisions are kind of made for you to generate as much profit as possible and to siphon that off to an elite group of shareholders and so that in the ability for private parties to drive those decisions is tied into their influence of politics yeah of course who who owns and controls capital pretty much  on the phone macro sense is that it helps distribute wealth in a different way house address the issues of inequality in our society so you know if you have a more distributed system of ownership you have a more distributed system of wealth and control which then translates into politics and of course what we have know is this concentration of wealth and increasing amounts of concentration it seems to be unbounded what they are the growth of the have today is a banking system that is more consolidated more financial eyes that it was that in two thousand and seven the banks that were too big to fail in two thousand and seven two thousand and eight are even bigger today so the idea that we would have another financial crisis and not be forced to either bail out the banks or do something different which is what i propose doing something different i say isn't rational it's not real every observateur every credible up circle of the financial system says that we're going to have another financial crisis at some point that's uncontroversial we just don't know where this kind of you know what sector is going to come from and how that is going to going to have another crisis and if we're going to another crisis and the banks are even more consolidated and this is even more financial eyes that we're going to have a situation is very similar to you so if we do a little envisioning here how do you think that's going to play out what i remember from two thousand and eight and nine wides that they were talking about how the othe know they just showed up one day and they give us a punch of money give this outrageous amount of money congress initially said no way you're crazy and then the next day they gave the money you know it was very in quick order and then of course the fed issued sixteen trillion dollars without anybody's permission to give to their banking friends around the country what's going to prevent that from happening next time yeah i think as it stands right now nothing is going to prevent it from happening again next time we had financial reform legislation that was put in place after the crisis last time that supposed to stop that circumstance of happening again but i think most people look at that and they realize that it was weak legislation to begin with you know constrained i diot frank that it was during the financial crisis of one of the ironies of dot frank is that they actually tight the federal reserve is hands up bit more than it was last time so for instance some of the in new york times not so long ago trying to predict this it seemed to me that they were setting the stage for you know setting up a little some smoke signals saying you know this if this happens we're going to need something a freer hand i was shocked that they suggested that they would need a freer hand but the idea of a public option really has never been on the table has it i mean and have the commentators also indicated that they didn't believe the public option would even be a viable contender for consideration well a public option was never on the table in any sort of rational but it was always on the table behind the scenes and what we saw in the last financial crisis was that the us government did resort to nationalizations in certain circumstances so with g g a mack citi group they did take ownership of certain percentage as controlling percentages of those companies what the problem was is that they did everything in their power to avoid calling it the nationalization so they did all these behind the scenes dealings there was no transparency no accountability there was no voting rights that went along with these ownership stakes in many cases so it pretty much proved all of the worst stories about government intervention into markets correct all because they were refused to actually call it nationalization and take voting rights  excess in accordance with the amount of shares that they took in these companies so i think going forward in the future what we need is an explicit public option one that has been studied and thought out or had maybe it hasn't been passed into law but it's there on the shelf  and that does this in a clear and transparent way and that does it in the way that many other countries around the world do it that it owning rights introversion yeah and that's a new you know you're not aware of that being in anybody's policy discussion at this point a public option i don't i don't think so i think in the progressive circles that much of the energy at the federal level is around breaking up the banks and presenters and others have floated this proposal and my my main concern w that i mean i'm fully in support of breaking banks but i don't think in this current policy atmosphere with republicans in control of congress and on top of the white house the president the banks is a viable option so you know that just leads us to the point where we're that's a pretty requisite actually breaking them up once you control them you can break them up i see and what would it look like so let's say you know the news is that the banks can't meet they're not there if they can't balance their books  what happens what would happen in your scenario could you kind of paint a picture a force of what we'd like to see happen perhaps well i think when there's a financial crisis a financial crisis is terrible but it's also an opportunity for banking system so when there's a financial crisis the banks are going to come running to the government for money just like last time they're going to the hands out for bailout and at that point if we have a plan if there's something on the on the books something that's been discussed then we can demand that the exchange for that capital we get for voting rights and ownership shares and then we need to start discussing long term public ownership because in the last financial crisis there were plenty of our columnists who went on t record in favor of nationalizing banks but only temporarily they were not in favor of sort of a long term solution of public ownership in the banking sector and that really discounts i think some of the experience around the world that you mentioned earlier with some the successes of public and so if there is another financial crisis maybe we don't want to just take them temporarily and then we want to think much more strategically long term about how we can use public ownership in the banking sector to really benefit economy in different ways and in certain sectors and and what would the architecture of of a publicly owned financial or banking system look like yeah all in my opinion as i said i think we need to work from both ends there's a financial crisis so i think we can take control potentially of wall street banks of the big five next time there's a financial crisis and this could really be a compliment to the public banking community bank and that's really bubbling up around the country so these banks could be structure network of public regional banks as opposed to what we've got now it's yeah well i mean i think the last financial crisis was was very clear and the dangers of what happens when you have very banks in so i believe the last eighteen years since two thousand they were all or a mid maybe died hundred ninety five somewhere in the last twenty five thirty years there were about fifteen roughly but fifteen thousand sixteen thousand community banks  that's banks that were under a certain reasonable local regional kind of a size and now they're less than six thousand the so that falloff has been a dramatic has had a dramatic impact on both consolidating the power  into into the large bank interests as opposed and robbing the local communities of the money they need for investment so it's it's a very important strategic and architectural kind of a step to design a new economic system around a distributed network of publicly owned banks well your your book it must it's you i know you're just back from england and you've been doing a book tour i understand a book too and wonderful for you  our commonwealth the return of public ownership in the united states would of course been talking about there a bit in the banking format but is this a trend of that is happening you know maybe maybe like me you know you grew up poor or you felt that you know america sort of the beating heart of free market capitalism in the world ad you know we have private everything and capitalism sort of runs  actually because of the way our political system is structured that's much more decentralized than some political systems around the world we actually have a pretty robust experience of historically and contemporarily with alternative forms of ownership public ownership being one of them so what why i wrote this book is basically in two thousand and fifteen i was studying the topic and i came across the fact that in the process which is a very conservative state politically every single resident gets their electricity everything resident and business gets her electricity from public the is on the other hand to your point there is definitely a resurgence in interest around public ownership around the world and also in the united states or around the world you have these in this position campaigns are going on in many countries especially in europe and south america energy sector the water sector where he's previously privatized disease are being brought back to local government operation because of absolute catastrophe or privatization human rights and the united states is actually there as well railroads post office a bunch of a lot of things and now that it even looks like the u k will be might be returning to it and that was a change in management yeah yes so the united kingdom is actually a very interesting case because it was actually you know the sort of ideology of privatization and there is no alternative really took hold kingdom in a way that didn't take place to take hold in the united states england you know when hook line and john mcdonald they have a very ambitious program especially for political party one of the main political parties and i just realized country to really take various sectors back into public ownership and not just take them back into public ownership the way they were structured hands of the people back in the hands of the workers the consumers to really give people much more say at how to run and operate enterprise interest in the democracy collaborative has been a very instrumental are active in working with ops with cooperative ownership which seems to be also on the rise perhaps in a floor and it's a very similar sort of a phenomenon isn't it yeah yeah exactly so i study ownership very powers that are currently gathered around managing our affairs and our assets it's a notion of commonwealth which is kind of a also a restored term you know the commonwealth of pennsylvania i think virginia massachusetts and the commonwealth but the whole idea of the commons has also returned in this day and age in part i gather because of the failure and also the failure of these people to the private interest to manage effectively and efficiently but also to the exclusion of people's well being and it like that so just the last couple of minutes we've got here thomas what else in your in your book should we be looking for in that speaks to  what's on people's minds and what's emerging in our headlines yeah so i think one of the most important points that i make in the book at least from my perspective is we don't we not only me in the latter part of the book we talk a lot about democratization and i think that's the most important part yeah well thomas thank you very much for taking the time and congratulations on the new book our commonwealth the return of public ownership in the united states and you're one of a new group of voices that's really bringing this to the fore we appreciate your hard work on this and of course what you're doing at the democracy collaborative to thank you so much institutionally inside of our government public banks being one of the new arrivals on relatively new arrivals at least from a discussing standpoint from a popular engagement standpoint knowing of course that public banks in this country have u have a strong tradition of success the bank of north dakota being one hundred years old but also an example of what can happen and the benefits of how the public bank can serve in unique ways the priorities of the