Part four in our series on public banking takes us to Michigan where a public banking bill has received bipartisan support but has one critic raising serious concerns. Series editor S.L. Mintz is exploring public banking in depth for us and taking account of its critics. He writes:
"Recapturing tax revenues in a state bank sounds to fans like a solution. To finance professor Andrei Simonov at Michigan State University, however, it sounds perilous. A giant pot of money susceptible to political motives alarms him, notwithstanding an auditor general and other assurances of insulation. ‘I would love to be convinced that politicians can run banks,’ says Simonov, ‘but everything in me tells me it cannot be done.’"
Stay tuned for a look at a successful government-run, alternative financing program in Virginia (it’s not exactly a bank, but it’s making loans), and a final piece in the series where public banking advocates assess criticisms and weigh in.