Think Globally, Bank Locally

Let’s create safer, saner ways of managing our money
by Eric Utne
January-February 2010
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When Ron Paul and Dennis Kucinich and talk radio types rail about the Federal Reserve and Wall Street and international bankers, do the words fringe and conspiracy theory and even wack jobs come to mind? Me too. Or at least they used to—but that was before the economic meltdown shook the world.

Since then I’ve been talking with everyone I know, and some people I don’t know, about what happened to our money and why, what’s going on with it now, and how we can change the system.

I recently attended the Economics of Peace conference, sponsored by RSF Social Finance and the Praxis Peace Institute, and learned about a variety of positive and hopeful initiatives, including alternative, complementary, and local currencies, mutual credit exchanges, barter systems, and cooperatives.

One of the most compelling presenters at the conference was Ellen Hodgson Brown, the author of the book Web of Debt (Third Millennium, 2008). Brown laid out how we the people lost the power to create money and how we can get it back again.

Banking shenanigans have been with us since Babylonian times. According to Brown, we’ve also had egalitarian money systems that worked quite well. Before the Revolutionary War, each American colony printed and circulated its own currency. These currencies were not backed by commodities, like gold or silver. Instead, they were based on trust.

In Ben Franklin’s Pennsylvania and other colonies, people were willing to accept the local currency as legal tender, there was plenty to go around, and commerce thrived. But the British government intervened and forbade new issues of this colonial scrip. Taxes had to be paid in gold, which meant borrowing from the British bankers. The result was widespread depression, which was a key factor that led to the revolution.

Ever since, Brown argues, private banking interests in the United States have usurped the public’s power to issue money and have captured the nation by debt. The tipping point came in the summer of 2007, with the collapse of two Bear Stearns hedge funds. The result was a credit freeze that crippled U.S. banks. The government’s solution has been to bail out banks considered “too big to fail” with taxpayer money. But Brown says the money isn’t making it into the real economy and that the derivatives exposure of U.S. banks is $175 trillion, far more than the taxpayers can afford to underwrite.

To escape the debt trap and reclaim control over our financial future, we need to quit bailing out Wall Street and restore the publicly issued money system of the American colonists. We don’t have to convince Washington or reform Wall Street to accomplish this. We simply need to think local, and create our own municipal and state banks. As Buckminster Fuller said, “To change something, build a new model that makes the existing model obsolete.”

The only state-owned bank in the United States today is the Bank of North Dakota, which was created by a movement of farmers in 1919 because they were losing their farms to outstate banks. North Dakota has largely escaped the Wall Street credit debacle by generating its own credit through this publicly owned bank. The state has the lowest unemployment rate in the country and the largest budget surplus it has ever had, $1.2 billion.

All state funds are deposited in the bank, which makes subsidized loans to spur development, underwrites municipal bonds, and even issues student loans. The bank’s president, Eric Hardmeyer, has described it as a “Mini Fed,” and  it enjoys widespread public support.

Other states could start their own banks as well. Farid Khavari, a Democrat, is running for governor in Florida on this platform. Ellen Brown argues that California has enough assets to create its own bank, charge interest rates as low as 2 percent, and finance its entire budget out of the profits. (Jerry Brown, are you listening?)

We the people have the power to create a financial system that works for everyone. We need a national conversation about money. To learn more about how the system works, we need to risk sounding stupid, or fringy. Talk to your friends and neighbors. Ask your mayor and other local officials what they’re doing to establish a municipal or state bank where you live. And to Ron Paul and Dennis Kucinich, my apologies. Thanks for getting the conversation started.


For more information, see Ellen Hodgson Brown’s website,


Eric Utne, the founder of Utne Reader, is a senior fellow at the University of Minnesota’s Center for Spirituality and Healing and the founder of Community Earth Councils, which bring together baby boomers, millennials, and others to address social and environmental challenges at the local level.

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Post a comment below.


Billy Halford
8/13/2011 8:12:24 PM
Thanks for the tip. Am looking now for a local bank. Hope you will keep Paul and Kucinich in the light.

Scott Baker_3
1/29/2010 4:03:25 AM
Anyone interested in setting up a State Bank in California should sign my petition on Change.Org like 560 other concerned citizens already have: Your e-letter will be sent to dozens of state officials, including the Governor, proposing a State Bank of California.

Arthur Edwards_1
1/13/2010 9:12:25 AM
The perspective that Ellen Brown offers may be compelling but is it enlightening? Having also attended the Sonoma conference I was interested by the question one young participant asked Tom Greco, essentially whether there was common ground between the solution he is pointing to and the state-bank idea of Ellen Brown. His answer was diplomatic. I would recommend anyone interested to read his book 'The End of Money and the Future of Civilisation' or watch his presentation at When you say: To escape the debt trap ... we need to ... restore the publicly issued money system of the American colonists. We .. need to create our own municipal and state banks. one might find oneself going from frying pan to fire. The question is whether 'we' as you use it means 'the state' or whether it could also be individuals working together associatively.

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