Communities should build systems that enable local investment in local businesses and shun the toxic nostrums peddled by Wall Street, three panelists urged at a forum Tuesday evening.
"America needs a revolution, and that's what this forum is all about," moderator Frank Nuessle, director of research at the Public Banking Institute, said in opening remarks at Franklin & Marshall College's Bonchek Lecture Hall.
The institute, based in Newtown Square, advocates setting up public banks — financial institutions owned and operated by states and local governments. Such banks can be structured to operate in the public interest, using public agencies' funds as capital, advocates argue. An example is the Bank of North Dakota, the sole state-owned bank in the U.S.
Speaker Michael Shuman sharply criticized U.S. securities laws, saying they unduly limit most investors' options, leading to a glut of money for large public companies but capital scarcity for small business. The author and "community economist" advocated a range of strategies local residents can use to circumvent the rules and invest in local enterprises.
Reading Mayor Vaughn Spencer took office in 2012 in a city identified by the 2010 U.S. Census as having the highest poverty rate in the U.S. It has since improved slightly, to No. 6, he said.
Spencer described his city's disillusionment with Act 47, the state's program for distressed cities, and laid out some of the alternative economic development strategies it is exploring. Reading has learned it must reinvent itself and take control of its own destiny, he said.
Mike Krauss, an F&M alumnus and founding director of the Public Banking Institute, said "the middle class is being devoured" by globalization. Public banking can help reverse that, tapping money now sitting idle and using it for local economic development, he said.
Here are tweets from the Business Journal's live coverage of the forum.