Occupy Wall Street has been both criticized and applauded for not endorsing any
official platform. But there are unofficial platforms, including one titled the
"99% Declaration", which calls for a "National General Assembly" to convene on
July 4, 2012, in Philadelphia. 
The 99% Declaration seeks everything from reining in the corporate state to
ending the Federal Reserve to eliminating censorship of the Internet. But none
of these demands seems to go to the heart of what prompted Occupiers to camp
out on Wall Street in the first place - a corrupt banking system that serves
the 1% at the expense of the 99%. To redress that, we need a banking system
that serves the 99%.
Occupy San Francisco has now endorsed a plan aimed at doing just that. In a
December 1 Wall Street Journal article titled
"Occupy Shocker: A Realistic, Actionable Idea", David Weidner writes:
in the Bay Area, especially Occupy San Francisco, have something their East
Coast neighbors don't: a realistic plan aimed at the heart of banks. The idea
could be expanded nationwide to send a message to a compromised Washington and
the financial industry.
It's called a municipal bank. Simply put, it would transfer the City of San
Francisco's bank accounts - about $2 billion now spread between such banks as
Bank of America Corp, UnionBanCal Corp and Wells Fargo & Co - into a public
bank. That bank would use small local banks to lend to the community. 
The public bank concept is not new. It has been proposed before in San
Francisco and has a successful 90-year track record in North Dakota. Weidner
notes that the state-owned Bank of North Dakota earned taxpayers more than $61
million last year and reported a profit of $57 million in 2008, when Bank of
America had a $1.2 billion net loss. The San Francisco bank proposal is
sponsored by city supervisor John Avalos, who has been thinking about a
municipal bank for several years.
Weidner calls the proposal "the boldest institutional stroke yet against banks
targeted by the Occupy movement."
Responding to the critics
He acknowledges that it will be an uphill climb. In a follow-up article on
December 6, Weidner wrote:
Of course, there are critics. ... They argue
that public banks would put public money at risk. Would you be surprised to
know that most of the critics are bankers?
That's why you don't hear them talking about the $100 billion they lost for the
California pension funds in 2008. They don't talk about the foreclosures that
have wrought havoc on communities and tax revenues. They don't talk about liar
loans and what kind of impact that's had on the economy, employment and the
real estate market - not to mention local and state budgets. 
Risk to the taxpayers remains the chief objection of banker opponents. "There
is no need for such lending," they say. "We already provide loans to any
creditworthy applicant who comes to us. Why put taxpayer money at risk, lending
for every crackpot scheme that some politician wants to waste taxpayer money
Tom Hagan, who pays taxes in Maine, has a response to that argument. In a
December 3 letter to the editor in the Press Herald (Portland), he maintained
there is no need to invest public bank money in risky retail ventures. The
money could be saved for infrastructure projects, at least while the public
banking model is being proven. The salubrious result could be to cut local
infrastructure costs in half. Making his case in conjunction with a Maine
turnpike project, he wrote:
Why does Maine pay double for turnpike
improvements? Improvements are funded by bonds issued by the Maine Turnpike
Authority, which collects the principal amounts, then pays the bonds back with
Over time, interest payments add up to about the original principal, doubling
the cost of turnpike improvements and the tolls that must be collected to pay
for them. The interest money is shipped out of state to Wall Street banks.
Why not keep the interest money here in Maine, to the benefit of all Mainers?
This could be done by creating a state-owned bank. State funds now deposited in
low- or no-interest checking accounts would instead be deposited in the state
Those funds would be used to buy up the authority bonds and municipal bonds
issued by the Maine Bond Bank. All of them. Since all interest payments would
flow into the state treasury, we would end up paying half what we now pay for
our roads, bridges and schools.
North Dakota has profited from a state-owned bank for 90 years. Why not Maine?
The state bank could generate "bank credit" on its books,
as all chartered banks are authorized to do. This credit could then be used to
buy the bonds. The government's deposits would not be "spent" but would remain
in the government's account, as safe as they are in Bank of America - arguably
more so, since the solvency of the public bank would be guaranteed by the local
Critics worry about the profligate risk-taking of politicians, but the trusty
civil servants at the Bank of North Dakota insist that they are not
politicians; they are bankers. Unlike the Wall Street banks that had to be
bailed out by the taxpayers, the Bank of North Dakota invests conservatively.
It avoided the derivatives and toxic mortgage-backed securities that
precipitated the credit crisis, and it helped the state avoid the crisis by
partnering with local banks, helping them with capital and liquidity
requirements. As a result, the state has had no bank failures in at least a
With intelligent use of the ever-evolving Internet, truly effective public
oversight can minimize any cronyism. California's pension funds might have
avoided losing $100 billion if, instead of gambling in the Wall Street casino,
they had invested in infrastructure through the state's own state bank.
The constitutional challenge
In Weidner's Wall Street Journal article, he raises another argument of
opponents - that California law forbids using taxpayer money to make private
loans. That, he said, would have to be changed.
The US Supreme Court, however, has held otherwise. In 1920, the constitutional
objection was raised in conjunction with the Bank of North Dakota and was
rejected both by the Supreme Court of North Dakota and the US Supreme Court.
See Green v. Frazier, 253 US 233 (1920), . (For further discussion on this,
see note 6 below.)
A municipal bank would be doing with the public's funds only what Bank of
America does now: it would be lending "bank credit" backed by the bank's
capital and deposits. The difference would be that the local community, not
Florida or Europe, would get the loans; and the city of San Francisco, not Bank
of America, would get the profits.
California and many other states already own infrastructure banks that use the
states' funds to back loans. If that use of public monies is legal, and if
public funds can be deposited in Bank of America and used as the basis for
loans to multi-national corporations, they can be deposited in the Bank of San
Francisco and used as the basis for loans to the local community.
Better yet, they can be used to buy municipal bonds. Investing in municipal
bonds would avoid the constitutional issue with "private loans" altogether,
since the loans would be to local government.
Sending a message to Wall Street
The campaign to "move your money" has gotten a groundswell of support, but move
your money into what? Weidner repeats the complaint of critics that private
credit unions have gotten too big and threaten commercial banking. Having
greater impact would be to "move our money" - move our local government
revenues out of Wall Street banks into our own publicly owned banks, which
could then generate credit for the local economy and public works.
Ellen Brown is an attorney and president of the Public Banking Institute,PublicBankingInstitute.org. In
Web of Debt, her latest of 11 books, she shows how a private cartel has usurped
the power to create money from the people themselves, and how we the people can
get it back. Her websites areWebofDebt.com