America’s One Public Bank is number one in saving small businesses
The $ 500 billion Congress sent to the Treasury Department to stimulate the economy may be rotting in Steven Mnuchin’s backyard, and the P3 funds he sent to banks for them. distribute to small businesses may or may not have sunk all the way to Main Street, but at least there is a bank with a unique record of helping small businesses.
It is the only public bank in the United States, the Bank of North Dakota, established in 1919 by the state government, then headed by Governor AC Townley, a former socialist and still on the left, and never yet privatized during of the 101 years that followed.
The Bank is the reason North Dakota distributed more funds per worker (over $ 5,000) through the P3 program than any other state, according to a survey driven by The Washington Post.
Normally, the Bank does not issue individual or retail loans (although it does issue student loans). But it partners with the state’s private local banks for small business loans and provides advice to these local banks and businesses when reaching out to global markets and financiers. The Bank’s assistance to local state banks also enabled them to remain vibrant and resist absorption into national mega-banks. For this reason, North Dakota has more banks per person than the other 49 states.
As soon as Congress established the PPP program, the Bank put local banks in touch with the Small Business Administration and various political leaders, and, the To post reports, bought some of the loans from local banks to spread risk and costs, allowing these banks to continue lending. In the rest of the United States, by contrast, PPP funds went through private banks that did not have a larger partner willing to offset their loans or help them secure and distribute more adequate levels of funding.
The lesson from North Dakota, apparently, is that the best way to help small-scale capitalism is through large-scale socialism.