Recent headlines indicate that the State of Oregon faces another $1 billion in deficits. The trickle-down effect of the financial crisis that started with Wall Street banks has now come to all our Main Streets across Oregon.
Ironically, while Wall Street is handing out ever- bigger bonuses, State employees will be handed pink slips. In parallel, the private sector has handed out its own round of pink slips as unemployment sits at 10.6% (and almost 20% if one counts those who are off the roles but have given up trying to find employment.). Thus many will clamor for cutting more out of the State coffers, but we must remember that State employees shop at local stores, pay mortgages, get their hair cut and otherwise are an intricate part of the dance between the public and private systems that create Oregon. There’s no way to separate them….they are interdependent. So while cutting back on State expenditures looks effective, it is far less so when you factor in how that cuts back on private businesses too.
We are not the only State in budget crisis. This is happening everywhere. The City of Los Angeles recently announced that they would need to fire 1000 City employees immediately else they would be filing for bankruptcy. But as one citizen said at a public forum on the issue, “If you lay off 1000 City employees, that’s 1000 mortgages that won’t be paid, 1000 people not stopping by our local businesses and eventually, we’re all filing for bankruptcy. When does this end? “
And that’s what we all have to stop and ask ourselves—when does this end?
The work of our State doesn’t exist because of green pieces of paper—it exists because our communities need and want these services in order to create a thriving Oregon. The State may have come up short on $1 billion green pieces of paper, but it is not short on the work that needs to be done.
Another billion in budget cuts in addition to the $2.3 billion last January results in a huge retraction of our lives. We keep acting as if there is no other option than this when in reality there’s a far better option available to us and that’s to create a State Bank of Oregon. Based on the 90 year, successful model of the Bank of North Dakota (BND), a State bank offers a way for us to recharge Oregon’s economy. The Bank of North Dakota model works: they have the lowest unemployment rate in the country (3.6%) and the only state in the country with NO DEFICIT. Right now 11 states are exploring the creation of a State bank as a way to untangle s from Wall Street and build thriving States backed by the full faith and credit of its citizens. Oregon should be the first to lead the way!
The State of Oregon collects and spends lots of money. Did you ever wonder where that money goes? Right now, much of it sits in the TBTF banks and they receive the benefits. In fact, we use the TBTF banks for lots of government services—even paying them to administer the OR SNAP program (food stamps). Instead, a State bank could provide these services, saving us millions as well as interest income returning to State coffers. The State Bank of Oregon would partner with local OR banks to make agricultural, small business, economic development and low-cost student loans to OR students. This availability of credit has all but disappeared from the TBTF banks, but with a State Bank of Oregon, small businesses and farms—which are the backbone of OR’s economy could once again get back to work!
The Bank is a profitable business but the profit belongs not to shareholders and CEOs but to the State of Oregon and its citizens. In North Dakota, it has enabled them to lower taxes and help fund more small businesses that benefit the state overall. As a bankers bank, however, it doesn’t compete with local community banks but instead helps them to compete with the TBTF bank and as a result, it ensures that Oregon’s money it put to work in Oregon and for the benefit of Oregon and her citizens.
Ultimately, this comes down to us thinking about the future of Oregon and our children. As we cut back more and more services, our children have to live in this world of limitations. The easy choice would be to simply say that we have no choice and to stay stuck in status quo and the same old way of doing things. Or we can stand up and make a new choice—one that isn’t all that difficult since the Bank of North Dakota has already proven this is a winning model. Taking this step is to tell Wall Street and the banking system that perpetrated this crisis that we will not let their actions ruin our lives but instead use it as a catalyst to create new solutions and a better Oregon.