What do the Green Bay Packers and the Bank of North Dakota (BND) have in common? Both are public options – and stand out amid their privately-owned competitors. The Packers are very profitable, they win and win a lot, more than our Bears and the rest of the teams in the NFL. The BND generated 17 percent annual returns over the last sixteen years, beating big banks year after year. Both public options make healthy profits and give back to their communities, a potent combination missing from today’s extractive capitalism.
The Roosevelt Institute’s Felicia Wong said it best: public problems require public solutions. We could not agree more.
As elected officials in Illinois plan for a COVID-19 economic recovery, we believe public options for housing, banking, child care, and broadband must be on the agenda.
We cannot return to the pre-COVID economy where Americans were taking on significant debt and saving less. Side hustles and gig work to repay student loans were the norm. Housing and child-care costs were impacting childbirth rates. In rural communities, we saw higher levels of social isolation. Toxic stress reduced life expectancies. These problems require more housing, more jobs that pay living wages, and a 21st Century social safety net.
Big banks and large corporations have consolidated significant amounts of U.S. wealth – and they use it to shape the market and then use the market to dictate what the government does. Solving for this requires the public to change laws while simultaneously participating in the markets. The public cannot fight a two-front war by engaging only in one.
Our epidemic of inward nationalism and corrosive politics is a direct result of these problems, and the policy choices of the last 40 years are part of the root cause.
Public options sit between unfettered markets and state control, the type of balance that is desperately needed today. By entering the market, we change the market – push private actors to be better, to compete rather than limit competition. Changing the markets rebalances the power in government, making it possible to turn away from a predatory economy based on extracting money from the poor to create wealth for the rich.
What about the costs? Public options are businesses that generate revenue – much like the Packers or the Bank of North Dakota – but at lower price points. The public already has the money needed to finance these new businesses. Government deposits and public pensions account for 16 percent of the U.S. annual GDP, about $5 trillion. By harnessing a slice of our money, we can finance public options in housing, banking, childcare, and broadband – and send back returns to taxpayers and retirees.
Markets are no divine force; we enable them. Corporate personhood has reduced our collective power; public options restore it. They are not a panacea for solving inequality, but public participation in the markets is necessary to address inequality. After all, markets work best when there is real competition. The Green Bay Packers and the Bank of North Dakota have proven this idea over and over.
Time to Bear down, Illinois.
Ameya Pawar is a Leadership in Government fellow with George Soros’ Open Society Foundations and a senior fellow with the Economic Security Project. Harish I. Patel is the Executive Director of Economic Security for Illinois.
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