Thursday, August 18, 2011

We need to create a California state bank

 U.S. companies keeping their money abroad to avoid taxes.  These taxes could be used to hire teachers, police, firemen, etc.
Microsoft.  $42  Billion, Cisco systems. $38. 8 Billion, Google, $16 Billion. According to the N.Y. times, JP Morgan Chase estimates that U.S. based multinationals hold $1.375 Trillion outside of the U.S.
Many of these companies pay more taxes outside of the U,S., and a higher percentage of taxes outside of the U.S. than in the U.S.
What is an alternative?  Well to start with we should create a publically owned California bank to promote California prosperity. We need a bank that is a part of democratic planning in which what is invested, where it is invested, and how it is invested in democratically decided.
For example, the people of California are currently paying for, and will pay in the future for, a trans bay bridge at a cost of about  $13.5 Billion. The original proposal was for a  $3.5 Billion bridge.  The steel  for this bridge is being manufactured and created in China- while California has a 11.5  % unemployment rate. Where were these decisions made? Who made them?  Someone profited from these decisions, not you and I.

If we created a Bank of California, like the Bank of North Dakota, we could create a public utility like SMUD (The Sacramento Municipal  Utility District) to collect, manage and direct our tax money.  This would save us all  money.  When the state needed money, it could borrow from the bank and pay ourselves interest instead of paying Wells Fargo.

There already are important first steps in this direction. Both PERS and STRS invest billions of dollars of Californian’s pensions in California projects.  And, the Brown administration has asked to “borrow”  millions from the CSU and the U.C., while cutting their budgets.  What we need instead is a state bank to handle the billions in tax receipts and to invest in growing full employment and the California economy.
Since the Tea Party and the Republicans prevent the needed stimulus at the national level (see post by Stigliz below), we are going to need to be more creative in how we use public money in California to promote jobs. 

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