Quantcast

Opinion: A public bank would be a public curse

Craig M. Regan lives in Granby.  This op-ed originally appeared on CTViewpoints.org.

Walking through Bushnell Park you can gaze upon many places that say who and what we are as citizens of Connecticut. Carved on one of these is “After the darkness, comes the Sun” (translated from Latin). People who are familiar will know this is carved on the Soldiers and Sailors Memorial Arch (1886), the oldest triumphal arch in North America.

Clearly the clouds are hovering over our beloved state once again. In those mountains of precipitation lie unknown and unseen dangers. From time to time, however a flash of lighting or a streak of sunlight will reveal the dangers that surround us. One of these dangers revealed to us is a public bank, most recently espoused for by State Rep. Josh Elliott (D) Hamden.

Reading his arguments it would seem as if the past 20 years have taught us nothing. More government does not work, but neither does less. The cheap lines of no government, small government or big government must give way to an expensive commodity: good government.

A public bank has been studied and refused, studied and refused. Elliott is not the only state legislator to express an interest in a public bank. Indeed, legislators from California to New Mexico have done hundreds of pages of reports and studies, with only one answer: NO.

These reports are public and can be read with a simple Google search (i.e. New Mexico public bank) . The idea that once state funds are moved from a ‘private account to a ‘public one‘ it would then seem a state can finally wave good-bye to fees, surcharges and interest. However the reality is much darker.

First, giving a government agency control over the purse strings would require a complete rewrite of the state constitution and a re working of the veins and arteries of state government. Should not the distinguished gentleman from Hamden propose something that the people need not wait until their grandchildren are grown to see realized?

The Hamden legislator also used the state of North Dakota and its public bank as smaller version of what a public bank would or could do for our state. Allow me to refute this argument as well. North Dakota has a population of 755,393, two-thirds less than ours. With a smaller population and a larger geographic space, it is simple math that the state cannot sustain long-term budget outlays and growth potential. It must finance publicly or it will die.

Our Connecticut is listed as fourth in terms of GDP/capita; money has never been and will never be a problem for us. We have the hardest workers, the most productive business people and are located between two of largest cities and ports in the United States. It is how that vast wealth has been spent that has caused the problem. Like a person with a Ferrari and Range Rover in the driveway of a 10,000 square foot home, we are a poster child of a lottery winner gone bad: blessed but irresponsible.

Second, the creation of a bank and for that matter another government agency will lead to politicians seeing the bank as a “break the glass in case of scandal” box. The temptation of lesser men and women to use the bank to increase risk and buy or sell assets for political gain will be too much to resist, regardless of the letter next to your name.

If a Republican had made this a cause I would denounce it with just as much energy, if not more because of the hypocrisy of growing another hand of the government before having fixed the other limbs. Given a state disaster or severe economic downturn, the solvency of the public accounts would be put under severe pressure because nearly every city in the state would be drawing from the same bank account for help. Imagine a run on the bank, but instead of people, it is her cities, armed with lawyers fighting over who is owed what and for what reason; ‘they’ deserve more than ‘them’. It will not exactly bind our people together, will it?

The history of this state is being written every day with every vote and every election. What is true is that the fate of Connecticut is in her people’s hands. Let those hands not only be ‘virtuous’ but knowledgeable and not tempted with quick reactions. Let them be tempered to the task in front of us. Let those same hands remove the darkness and release the sun to shine on all of Connecticut’s citizens.

6 comments

Bryan Meek January 6, 2019 at 9:05 am

$30 million was spent on the DMV system upgrades and by most accounts it was a near total failure. Amazon was started on a.$10 million investment. Now there are some who think our state can compete with private banks? When does the insanity end?

Alan January 6, 2019 at 4:40 pm

Bryan Meek…more like $200M with the 3M software upgrade that was trashed and then Ayala and Malloy tried to blame 3M. And that was just one instance. Malloy closed offices and then reopened them. AAA was selectively banned from doing DMV business and he opened Henry Street in Stamford so that illegals could get ID’s. It was understaffed and appointments were required but still resulted in hours long waits. Now they have the nerve to charge $8 to walk in the door, on top of normal DMV fees. And this is an agency that should be making money for the state!
Would you really trust this state with a dime of your money in a “bank”?!
It would be turned into a “quasi-state agency” and packed with friends and relatives making far more than you or I.
Look how well DECD and all its iterations does with their “investments”.
$1.4 BILLION of corporate welfare was passed out by Malloy and this state is still swirling down the drain.
The author of this article is delusional…it will never (nor should it) happen!

Jeff Hall January 7, 2019 at 12:10 pm

Rhode Island tried a much less ambitious idea in the 70’s: their own banking insurance system. The Rhode Island Share and Deposit Indemnity Corporation was supposed to create jobs and save the State government money. In fact, it was slow-motion disaster.

Bryan Meek January 8, 2019 at 10:03 am

@Deb. Besides your article being severely outdated, you don’t seem to understand depreciation systems and capital investment?. Amazon is on pace to generate $30 billion in free cash flow this year (more than the state’s operating budget) and has had positive earnings in each of the last 4 years. Their gross sales are on a pace to top CT’s entire GDP in a few years. Back to my point, the state has NO business competing with other businesses. AAA was doing a fine job and we shut them down. Tesla isn’t even wanted here and most major businesses are no longer hiring in CT, shutting down operations through attrition. Even floating the idea of a public bank should scare even more capital away.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>