Here’s one that just arrived in my inbox. John

Public Banking in America
Washington State Joins a Nationwide Movement
by Ellen Brown
Global Research, January 25, 2011

Bills were introduced on January 18 in both the House and Senate of the Washington State Legislature that add Washington to the growing number of states now actively moving to create public banking facilities.

The bills, House Bill 1320 and Senate Bill 5238, propose creation of a Washington Investment Trust (WIT) to “promote agriculture, education, community development, economic development, housing, and industry” by using “the resources of the people of Washington State within the state.”

Currently, all the state’s funds are deposited with Bank of America. HB 1320 proposes that in the future, “all state funds be deposited in the Washington Investment Trust and be guaranteed by the state and used to promote the common good and public benefit of all the people and their businesses within [the] state.”

The legislation is similar to that now being studied or proposed in states including Illinois, Virginia, Hawaii, Massachusetts, Maryland, Florida, Michigan, Oregon, California and others.

The effort in Washington State draws heavily on the success of the 92-year-old Bank of North Dakota (BND), currently the only state-wide publicly-owned U.S. bank. The BND has helped North Dakota escape the looming budgetary disaster facing other states. In 2009, North Dakota sported the largest budget surplus it had ever had.

The Wall Street Credit Crisis Is Crippling State and Municipal Governments

That state budget deficits are reaching crisis proportions was underscored in the January 19 New York Times:

[A]lmost everywhere the fiscal crisis of states has grown more acute. Rainy day funds are drained, cities and towns have laid off more than 200,000 people, and Arizona even has leased out its state office building. . . .

“It’s the time of the once unthinkable . . . ,” noted Lori Grange, deputy director of the Pew Center on the States. “Whether there are tax increases or dramatic cuts to education and vital services, the crisis is bad . . . .”

The “once unthinkable” includes not only draconian cuts in services, increases in taxes, and sale of public assets, but now filing for bankruptcy. States are not currently allowed to go bankrupt, but a move is afoot in Congress to change all that. Bankruptcy proceedings would allow states to escape pension and other contractual obligations, following the dubious lead of such megacorporations as General Motors and Continental Airlines.

Meanwhile, fears of state bankruptcy have caused state and municipal bond values to plummet and borrowing costs to soar. As with Greece and Ireland, rumors of bankruptcy become a self-fulfilling prophecy, bringing out the hedge funds and short sellers that turn prophecy into reality.

Addressing the Problem at Its Source: The North Dakota Model

While drastic spending cuts are being proposed and implemented, the states’ woes are not the result of over-spending. Rather, they were caused by loss of revenues and increased borrowing costs resulting from the Wall Street banking crisis. Jammed with toxic assets, derivatives, and the subprime mortgage debacle, the Wall Street credit machine ground to a halt in the fall of 2008 and has still not recovered.

And it is here, in generating credit for the state, that the Bank of North Dakota has been spectacularly successful. By providing affordable, low interest credit for business expansion, new businesses and students, the BND has helped North Dakota sidestep the credit crisis altogether.

The BND partners with private banks, providing a secondary market for mortgages; offers “wholesale” banking services such as check clearing and liquidity support to private banks; and invests in North Dakota municipal bonds to support economic development. In the last ten years, the BND has returned more than a third of a billion dollars to the state’s general fund. North Dakota is one of the few states to consistently post a budget surplus.

Unlike private banks, public banks don’t speculate or gamble on high risk “financial products.” They don’t pay outrageous salaries and bonuses to their management, who are salaried civil servants. The profits of the bank are all returned to the only shareholder – the people.

Washington State Representative Bob Hasegawa, a prime sponsor of the Washington legislation, called the proposal for a publicly-owned bank “a simple concept that will reap huge benefits for Washington.” In a letter to constituents, he explained, “The concept (is) to keep taxpayers’ money working here in Washington to build our economy. Currently, all tax revenues go into a ‘Concentration Account’ held by the Bank of America. BoA makes money off our money and we never see those profits again. Instead, we can create our own institution and keep taxpayers’ dollars here in Washington, working for Washington.”

Hasegawa said a key feature of the Washington banking institution is that it will work in partnership with financial institutions, community-based organizations, economic development groups, guaranty agencies, and others. He said the Washington Investment Trust will offer “transparency, accountability, and accuracy of financial reporting,” a welcome change from the accounting tricks common among the large Wall Street money center banks today.

A public hearing on HB 1320 is scheduled for Tuesday, January 25th, at 1:30pm. The bill is assigned to the Business and Financial Services Committee in the House and the Financial Institutions, Housing & Insurance Committee in the Senate.

For more information on the movement for publicly-owned banks, see

Ellen Brown wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Ellen is an attorney and the author of eleven books, including Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free. Her websites are and


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Bhutan's New King

Bhutan's New King

I reprint the following article in full. Isn’t it interesting how some of the best ideas come from the smallest coutries. Bhutan demonstrates a concept, Gross National Happiness, we can all learn from. Is Keynesian economics dead?


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Report from Bhutan: Gross National Happiness (GNH) versus Gross National Product (GNP)
Written by Junko Edahiro

Following the reports on China in our November and December issues in 2008 as part of our evolution toward “Asia for Sustainability” (AFS), JFS co-founder Junko Edahiro reports on a meeting she attended in Bhutan, the Fourth International Conference on Gross National Happiness (GNH).  It was held in Thimphu, the national capital, from November 24 to 26, 2008.

Gross National Happiness (GNH) is an index used to measure national strength and progress based on people’s happiness, rather than on levels of production as measured by gross national product (GNP) and gross domestic product (GDP). This concept was described in 1976 by Bhutan’s fourth king, Jigme Singye Wangchuck, as “more important than GNP,” and was chosen as the nation’s primary development philosophy and its ultimate goal of development.

See also: GPI, GNH, GCH: True Indicators of Progress

The first International Conference on GNH to promote the concept and creation of a GNH index was held in Bhutan in 2004, the second in Canada in 2005, and the third in Thailand in 2007.

The theme of the fourth International GNH Conference was “Practice and Measurement,” indicating a step forward into a new phase focusing more on how to reflect GNH in policies, and how to grasp the current situation and measure progress, rather than considering GNH as simply a principle or philosophy.

A total of 90 people from 25 countries attended the conference, with about 10 from Japan, which was the second highest number of attendees next to Bhutan. In the morning of the first day, the organizer gave opening remarks after a ceremony conducted by Bhutanese monks, then H. E. Jigmi Y. Thinley, the first prime minister of Bhutan following the country’s shift to a democratic parliamentary system, gave the keynote address.

The prime minister touched upon the words of King Jigme Khesar Namgyel Wangchuck, Bhutan’s fifth king, who, in his coronation address the week before the conference, clearly said that the “promotion of GNH was his responsibility and priority.” The prime minister in his speech also repeatedly said that GNH lies at the foundation of Bhutan‘s national policies. He also noted that, while most believe economic growth is necessary in order to alleviate poverty, “to believe this is to believe in killing the patient in order to cure the disease. Even the justification for economic growth for poverty alleviation seems very shaky, unless we radically improve redistribution.”

After the opening ceremony, the general meeting began, and one of the highlights was the announcement of the GNH Index by the Centre for Bhutan Studies. The idea of GNH is well-known, but how can it be measured? This is what the world wants to know today.

Bhutan has made four pillars of GNH the basis of its major governance

principles: economic self-reliance, a pristine environment, the preservation and promotion of Bhutan’s culture, and good governance in the form of a democracy. Nine dimensions support the four pillars: living standards, health, psychological well-being, education, ecology, community vitality, time use, culture, and good governance.

This time, in order to gauge the progress of advancement with the four pillars of GNH, 72 variables were selected to correspond to the nine dimensions, and a national survey was carried out. At the conference, a researcher from the Centre for Bhutan Studies presented the types of variables selected and an overview of the survey findings. Participants from other countries also gave papers on their studies and practices to measure happiness, which led to some lively discussions.

(See also the Gross National Happiness website, operated by the Centre for Bhutan Studies, for the GNH Index and the survey results, at ).

While the Bhutanese government actively promotes GNH, this does not mean that it guarantees the people’s happiness. It simply promises, as the nation and/or the government, that it will work to create the conditions under which individuals can seek GNH.

During the conference, one Bhutanese participant said, “Bhutan should build its own GNH-based economy, politics, and culture. Considering GNH, it is clear that even democracy is not an end. Democracy is a means of good governance necessary for GNH.” From such comments, I could sense a move to start considering GNH as a foundation of nation building, not just as a concept or an index, as many people think.

Obviously, Bhutan is not a utopia just because it advocates GNH. For example, in many areas of the country, infrastructure such as adequate water supply has yet to be developed well enough. The country also has many other problems related to modernization, particularly growing concern about an increase of juvenile crime and other social problems since the introduction of television.

In addition, even the term “GNH” is not specifically mentioned in Bhutan’s current tenth development plan. Later on, at the wrap-up session of the conference, a Bhutanese participant said that GNH should not be used to solve world issues but to solve national problems in Bhutan first.

The three-day conference was concluded with a strong message that putting GNH into the mainstream of Bhutanese politics will be a driving force in creating a more holistic society in the country. The next conference will be held in Brazil.


The fact that the prime minister gave the conference’s opening speech, with many ministers and cabinet officials in attendance, is an indication of the importance the government places on GNH. On the third day of the conference, I sensed the essence of GNH at an event at a luncheon hosted by the king, to which I was invited together with all the participants from outside Bhutan.

Prior to the lunch meeting, the newly coronated 28-year-old king stood in front of the entrance of the palace, shook hands with guests one by one, exchanged words for a while, and welcomed them all politely. I myself shook hands and talked with him for a while. There was no hurry with him at all to meet individually with the several dozens of guests.

He focused his entire attention on the here and now, serene like a calm lake. I sincerely felt that he cherished the time with me, and I was deeply impressed with this.

In regard to the character of the king, a person I interviewed who knows Bhutan well said, “At the coronation ceremony last week, citizens gathered from villages across the country to see him, even for just a glimpse, with many having made an overnight trip to get there. Tens of thousands of people stood in line. When people became impatient and were about to rush to him, the King took the microphone and said, ‘I promise to shake hands with the person at the end of the line. Please wait.’

When the time was almost running out, the King started walking and shook hands with everyone up to the last person and exchanged words, instead of standing in place and waiting to greet the people there.”

Also, as an example of the character of the former king, who established the basis of GNH, he administrated state affairs while living in a modest house, and when the Great Hanshin-Awaji Earthquake hit Japan, he prayed for three days without eating.

When I talked with Bhutanese people, I felt that they sincerely admire and respect the fourth king. And also I could feel that the fifth king, just as his predecessor, wants to cherish his people in earnest.

After greeting the conference participants, the king entered the luncheon hall alone, and lined up for food just like the rest of us.

When he had his food, he seated himself at one of the tables and started talking with people around him while eating. Watching him, I realized in a true manner that the king embodies the essence of GNH as one that treasures his people one by one, as well as sensing the hearts of those who respect the king.

Setting the GNH Index itself is only a start. Creating an index and measuring progress is one thing, while the holistic idea that “there is something important in those unmeasurables” is another. The question is:

How do these ideas get incorporated into their principle goal of making the Index useful for Bhutan and the rest of the world?

This is a very important process unfolding. I would like to watch its progress and promote the idea with like-minded people and groups around the world who think there is something more important in life than GNP and GDP. If you too are trying to measure or visualize something along these lines and want to change society by communicating it, JFS would really like to hear from you.