Public Banking: How our State House power structure kills no-brainer solutions

Hi, this is Anna Callahan and you’re listening to Incorruptible Massachusetts.  Our goal is to help people understand state politics: we’re investigating why it’s so broken, imagining what we could have here in MA if we fixed it, and reporting on how you can get involved. Today I’m interviewing Charles Grigsby from Mass Public Banking Group.  Their mission is to persuade the legislature to authorize a public bank in MA.  This interview was a surprise to me.  I wasn’t surprised to find out how beneficial a public bank could be, but I was surprised to find that the effort to pass this legislation was a perfect example of the broken nature of the state house. The city of Boston spends 67 million dollars a year just on interest — that’s money that comes out of your pocket in taxes and goes to the 1% owners of Wall St companies.  Every city in MA does this, and it makes municipal projects cost 30%-50% more than they normally would.  Having a public bank would save every city in Massachusetts millions of dollars.  It’s a total no-brainer.  So why are we not able to pass this legislation?If you have been listening to this podcast, you won’t be surprised by the answer.  Both the Governor and the Speaker of the House directly benefit from us not having a public bank.  The Governor gives out grants to cities and towns, and in return mayors have to play nice with him.  Speaker DiLeo also hands out state money to house districts called “budget earmarks”. This is just one of the powers he has that gives him so much influence, and why house members do what he tells them to do rather than voting the way their constituents want them to.A public bank would reduce the concentration of power we have in our state.  It would give cities more autonomy; it would mean that districts were not so desperate for these earmarks.  So the speaker will make sure this doesn’t pass, because it would reduce his personal power over state reps, and consequently over what laws can pass in our state.In any other state, we’d ask you to call your state rep and insist that they co-sponsor the public banking bill.  But here in MA, your state rep could sign on officially as a cosponsor, then secretly kill the bill because you have no way of knowing how your state rep votes.  So all this points to how important it is that we make our state house transparent.  Chuck began as an international banker at Bank of Boston. He has managed a minority enterprise venture capital fund, served on the Board of Boston Private Bank, was President of Mass Growth Capital Corp. In addition to being on the steering committee of Massachusetts Public Banking he is on the advisory board for the Public Banking Institute.