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The BND "has come to be seen both in and out of the state as a beacon of economic stability and financial independence." Moreover, since 1997, it provided over $350 million in profits for the state's general fund.
Other states may follow suit, advocates, like Brown, saying "the benefits are obvious." Yet private bankers like Chris Cole have reservations. A senior VP and senior regulatory counsel at Independent Community Bankers of America, he said "lending to small businesses is making a comeback and has been keeping up with demand from qualified applicants."
Others disagree, saying banks are reluctant to lend. On March 12, McClatchy writer Kevin Hall headlined, "Small firms would like to hire you, if only they could get loans," citing the continued credit crunch affecting businesses like Quantum Energy Solutions co-owner Jim Collins saying he was turned down and can't expand.
Small Business Administration head, Karen Mills, said: "There's a big gap in access to credit for small firms now, and it's a huge problem. We have a sense that the banks are not back to lending the way that they need to be, going forward. If we're going to come out of this recession and get people back working, it's going to be because we give small businesses the support that they need."
It's especially serious because small business accounts for around two-thirds of private hiring. Starve them and harm the economy, as they're its growth engine. Yet they're even having trouble tapping existing credit lines, let alone get new ones.
According to Brookings Institution researcher Douglas Elliott, "The anecdotal evidence certainly suggests there's a credit crunch for small business." Even thriving concerns can't get loans. According to another analyst, "The banks don't want to take a chance on anybody that might fail" in a very risky environment, one that has credit contracting at a record pace, at least through Q 1 2010. The evidence shows banks aren't lending and repaid loans aren't being replaced with new ones, no matter how fast the money supply expands.
What better argument for public banks with every incentive to want to stimulate state and local growth, especially when Wall Street prefers to speculate, not lend as banks are supposed to do, and their model hurts everyone except their bottom line.
Hartwick College, New York Research/Scholar Adrian Kuzminski cites 19th century "proto-populist, Edward Kellogg....a kind of godfather" to later monetary populists and a "profound" writer on monetary issues, yet little known.
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