By Karen Petrou
As I write this, thousands of small businesses are clamoring for urgent SBA loans and so many Americans are filing for unemployment insurance that systems have crumpled across the country. At the same time, the S&P rose over three percent since Monday’s open. The reason for this dissonance lies in the fact that key parts of the financial market have been bailed out while ordinary borrowers are stuck and then some. Saving markets won’t salvage the economy – at its root, the U.S. is a consumption-driven economy. If consumers can’t survive, neither will the economy. The Fed must add a Family Financial Facility to all those it has crafted for the financial market and it should open one fast. In this crisis, time is truly money and money is what most families don’t have.
Continue reading “The Family Financial Facility: Urgent, Overdue, Equitable Fed Support for Those Most in Need”
By Karen Petrou
In a blog post this summer, we assessed the history of U.S. public banks over three centuries. We concluded that, “The best way to ensure that financial intermediation advances social welfare is to define a carefully-constrained charter, mandate transparent limits on self-dealing up front, and ensure that the bank is fit for purpose under reasonable rules that ensure long-term profit in concert with effective public service. Public subsidies to support public service make sense, but only when sufficient regulation and private-sector discipline constrain the natural self-serving instincts of all-too-many politicians.” Maybe so, but sizeable minorities of voters this November said that they so distrust private banks that they want a public alternative no matter the controls that might apply. In a blue-wave mood, federal legislators are listening. Continue reading “Public Banking Under a Blue Wave”