Abby Rapoport finds what she takes to be a gleam of sanity on the windswept waste: a state-run bank in North Dakota. Abby thinks it's a real lollipops and puppydogs story and in fairness, from what little I know, she's essentially correct: not only do they have a state bank but they invest a good deal of their money in sensible projects without undue waste or corrupt self-dealing--and without Wall Street control.
Abby is startled. As to her surprise, she might want to go back and have a few words with her American studies teacher. In context, I'd say that North Dakota is not at all a surprising locale for a venture in people's finance. They've got a long tradition of Prairie radicalism fused with that peculiar blend of Scandinavian ancestry that still makes the for the only kind of socialism that you and I would actually be willing to live under (maybe New Zealand, but they seem to have tired of it). And more important: this tradition is not at all inconsistent with Tea Party radicalism. What we're talking here is no conservatism but populism: cranky and resentful and not always bound by tradition. It was North Dakota's Senator Lynn Frazier and Representation William Lemke, after all, who gave us the Frazier-Lemke farm bankruptcy act--one of those pieces of depression legislation that outflanked the new deal on the left. They had Gerald Nye, William Langer--hell, they had the Nonpartisan League, spun off from the Republican (sic) party to fight big banks, big railroads, big millers and corporate farms.
So, a little context, please. But there is a puzzle here and it cries out for an answer. The question is, not why does North Dakotans have a bank that works; the question is--why doesn't everybody else? No, wait--the point is more like thank God not everybody else has a state bank, because everybody else would screw it up. Think of the first rule of economics: if somebody has money in his pocket, somebody else is trying to take it out. I almost said "some politician," although I really don't want to speak so narrowly. But stick to public entities if you like: if there is a publicly run bank, you just take it for granted that somebody is trying to corrupt it or loot it it or otherwise turn it to a private purpose. The question is--I keep trying--not whether everyone else would do it wrong, but how come North Dakota does it right?
I certainly don't have a pat answer to that one. I said something above about Scandinavian ancestry. I don't for a moment mean to suggest anything here in the way of Nordic racial superiority. But I suspect there is something to the view that smallish societies, with high degrees of ethnic homogeneity a fair degree of economic equality, do seem to develop patterns of trust and institutional stability that others might envy (but didn't you say just few days ago that the Scandinavians really do not have all that economic equality?--ed Oops--Buce).
All of which suggests still another way to reframe the question. Say rather--if North Dakota has a successful state bank, why don't Minnesota and South Dakota, maybe Iowa and Wisconsin--why don't they have state banks too?
Abby is startled. As to her surprise, she might want to go back and have a few words with her American studies teacher. In context, I'd say that North Dakota is not at all a surprising locale for a venture in people's finance. They've got a long tradition of Prairie radicalism fused with that peculiar blend of Scandinavian ancestry that still makes the for the only kind of socialism that you and I would actually be willing to live under (maybe New Zealand, but they seem to have tired of it). And more important: this tradition is not at all inconsistent with Tea Party radicalism. What we're talking here is no conservatism but populism: cranky and resentful and not always bound by tradition. It was North Dakota's Senator Lynn Frazier and Representation William Lemke, after all, who gave us the Frazier-Lemke farm bankruptcy act--one of those pieces of depression legislation that outflanked the new deal on the left. They had Gerald Nye, William Langer--hell, they had the Nonpartisan League, spun off from the Republican (sic) party to fight big banks, big railroads, big millers and corporate farms.
So, a little context, please. But there is a puzzle here and it cries out for an answer. The question is, not why does North Dakotans have a bank that works; the question is--why doesn't everybody else? No, wait--the point is more like thank God not everybody else has a state bank, because everybody else would screw it up. Think of the first rule of economics: if somebody has money in his pocket, somebody else is trying to take it out. I almost said "some politician," although I really don't want to speak so narrowly. But stick to public entities if you like: if there is a publicly run bank, you just take it for granted that somebody is trying to corrupt it or loot it it or otherwise turn it to a private purpose. The question is--I keep trying--not whether everyone else would do it wrong, but how come North Dakota does it right?
I certainly don't have a pat answer to that one. I said something above about Scandinavian ancestry. I don't for a moment mean to suggest anything here in the way of Nordic racial superiority. But I suspect there is something to the view that smallish societies, with high degrees of ethnic homogeneity a fair degree of economic equality, do seem to develop patterns of trust and institutional stability that others might envy (but didn't you say just few days ago that the Scandinavians really do not have all that economic equality?--ed Oops--Buce).
All of which suggests still another way to reframe the question. Say rather--if North Dakota has a successful state bank, why don't Minnesota and South Dakota, maybe Iowa and Wisconsin--why don't they have state banks too?
4 comments:
"The question is, not why does North Dakota have abank that works; the question is--why doesn't everybody else?...The question is--I keep trying--not whether everyone else would do it wrong, but how come North Dakota does it right?"
Minnesota, Iowa, and Wisconsin are too big targets to have a successful State Bank in these post-intrastate-only banking days. (From what I can tell, South Dakota doesn't have a real economy. But now both of its residents will complain. Sorry in advance.)
Cantakerous Lutherans--but I repeat myself--made it possible there. The other strong possibility for a State Bank would be Montana--wide open spaces without a major metropolis [population of Helena, the state capitol, <30K], so a State Bank would remain a stable equilibrium in a way that Nevada or Colorado or even Wyoming could not, just because the lack of scalability makes a mass invasion by Chase or N/C/N/B/ BofA impractical.
"Think of the first rule of economics: if somebody has money in his pocket, somebody else is trying to take it out."
By the way, Steve Randy Waldman and I are both going to steal this line repeatedly. With credit when remembered.
Line buffed up and stolen from a friend who I suspect would rather remain anonymous. Nobody you know.
I've heard that the United States has a bank that works. ymmv.
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