TLDR:
Democratic Congresswomen Rashida Tlaib and Alexandria Ocasio-Cortez have proposed a bill that would allow the incorporation of financial institutions controlled by states and municipalities. These banks would be not-for-profit, tightly regulated, and given special government subsidies. However, critics argue that public banks would primarily be used to promote and finance leftist causes, giving politicians a blank check to advance their own ideological agendas. The bill would also result in taxpayer dollars being handed out to public banks for a variety of purposes, effectively bypassing the democratic process.
Key Points:
- Democratic Congresswomen Rashida Tlaib and Alexandria Ocasio-Cortez have proposed a bill that would allow for the incorporation of financial institutions controlled by states and municipalities.
- These public banks would be not-for-profit, tightly regulated, and given special government subsidies.
- Critics argue that public banks would primarily be used to promote and finance leftist causes, giving politicians a blank check to advance their own ideological agendas.
- The bill would also result in taxpayer dollars being given to public banks, bypassing the democratic process and allowing unelected federal agencies to exert control.
Democratic Congresswomen Rashida Tlaib and Alexandria Ocasio-Cortez have proposed a bill that would allow the incorporation of financial institutions controlled by states and municipalities. These banks would be not-for-profit, tightly regulated, and given special government subsidies. Tlaib and Ocasio-Cortez claim that public banks are necessary because the private sector has been “rigged” against those trying to participate in the economy. However, critics argue that public banks would primarily be used to promote and finance leftist causes, giving politicians a blank check to advance their own ideological agendas. The mandates for these public banks laid out by the Democratic Congresswomen make it clear that they’ll primarily be used for “environmental justice, tenant protections, labor standards, democratic governance.” This would give politicians the power to use and subsidize the banks to further their own progressive policies.
The bill proposed by Tlaib and Ocasio-Cortez is a rehash of their 2020 Public Banking Act, which failed to pass the House. In their press release and social media posts, the Congresswomen have suggested that private banks haven’t adequately served their constituents, noting that millions of Americans do not currently have a checking or savings account. However, critics argue that this is a vague and misleading argument, as for-profit institutions would not intentionally turn away good-paying customers. Banks are heavily regulated and, especially now when liquidity is needed, it wouldn’t make sense for them to refuse service to potential clients. The real reason behind the push for public banks seems to be the desire to push progressive policies that the Congresswomen haven’t been able to pass legislatively.
The creation of public banks would also result in taxpayer dollars being handed out to these banks for a variety of purposes. The bill includes provisions that would allow the Federal Reserve and the Secretary of the Treasury to approve grants to help public banks with everything from operational expenses to covering unexpected losses. This would effectively bypass the democratic process and allow unelected federal agencies to exert control over the banks. Additionally, the bill requires that public banks fund progressive programs and has strict lending instructions. It even forbids banks from lending to certain industries or companies, such as gun manufacturers or those with a high CEO-to-median-worker pay ratio. This would give politicians the power to use public banks as slush funds for Democratic lobbyists and would be highly susceptible to political corruption.
In conclusion, the proposal for government banks by Democratic Congresswomen Rashida Tlaib and Alexandria Ocasio-Cortez is seen as a dangerous tool for progressive ideologues. Critics argue that public banks would be primarily used to promote and finance leftist causes, bypass the democratic process, and give politicians a blank check to advance their own ideological agendas. The bill would result in taxpayer dollars being handed out to public banks and allow unelected federal agencies to exert control over the banks. It would also open up opportunities for political corruption and misuse of funds.
