Michigan Needs a 'State Bank'

by Michigan Sen. Hansen Clarke, D-Detroit

On March 16, 2010, on the floor of the Michigan Senate, Sen. Hansen Clarke, D-Detroit, and Sen. Tom George, R-Kalamazoo, debated whether the state of Michigan should run its own bank. This idea has recently been proposed by Lansing Mayor Virg Bernero, a leading candidate on the Democrat side for governor of Michigan.

Sen. George's remarks are here.

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Senator Clarke's statement is as follows:

Again, on this issue I did not expect to make any comments, but I do so for one compelling reason. In this state, amongst all the states in the Union, we desperately, desperately need jobs. We should be doing everything possible to do it.

Now those of us in this body, yes, we've got our partisan beliefs, and we have our ideological positions. We need to give those up immediately to put people back to work in this state. There are several ways that we can bring in jobs right now. One of them, and critically is this, small businesses need capital. There are so many businesses throughout the state of Michigan right now that are ready to expand, ready to hire people but the can't get the financing. We have developers who have already purchased the land and entered into leases to operate new facilities. They are ready to go, but they can't get a construction loan.

This proposed state bank would provide our small businesses with the capital that they need to create jobs now.

This works within the market, not against the market. The bank that we are proposing would be a wholesale bank which would support our community banks, which are also small businesses in this state that need help right now. They are on the verge of going under water, but they don't have the money to hire big, high-paid lobbyists in Washington to get them bailed out by Congress.

Let's you and I as taxpayers support our local business people so they can hire more people. This bank will not pose a risk to the taxpayers. The way the Bank of North Dakota operates is that it ends up buying federally-guaranteed loans from community banks. Here is the benefit of that, it frees up more money for the community banks to loan to other businesses.

I urge you to do everything you can possible to support our small businesses, and one of the things they need right now is access to capital. Yes, there are other reasons that they don't have access to capital. We need to make our lending and accounting standards that value the collateral that back these loans more flexible. That is what Congress should be doing right now; they aren't. That is one way to do it.

Let's not just blame other people. Let's take action to create jobs-this state bank along with other measures, such as training Michiganders for jobs that are already here right now in the state.

Mr. President, every year, there are 12,000 to 13,0000 jobs that are good-paying jobs that pay $50,000, $60,000-many times over-$100,000 a year, but Michigan employers can't find anybody in Michigan qualified to be hired into those jobs. There is another way that we can create jobs by training people to fill in those jobs.

So we can train people better. We can ask Washington to provide stimulus dollars that more directly create jobs, but most importantly, let's leverage the $23 billion a year that we collect in taxes and fees to create jobs right here in Michigan through the market by supporting our community banks that by supporting our small businesses that are struggling right now for their very existence. These are businesses that don't have political connections. These business owners have to work around the clock just running their business. They can't hire lobbyists to get bailed out like a big investment bank on Wall Street but they need our help, and if we help them, they will help our people by hiring more of our people.

Look, no plan is perfect. No plan is ideologically-neutral, but we are in an economic crisis in this state. I urge everyone to consider every possible angle to create jobs. Yes, I believe the government should be able to create jobs. Some of you may think, well, the market should. Let's pursue all of them right now. We need to do this.

This state bank is something that has worked for over 100 years at the Bank of North Dakota. The current Republican Governor of North Dakota was a former president of this bank. This works, and it can work here in Michigan.

In closing, we need to do everything possible, Mr. President, to bring jobs in Michigan. We can't say no to any legitimate way to bring in jobs. A Michigan economic development bank is good for business. It is good for our state. It will help support our community banks and provide more jobs and provide them as soon as possible. We need that today.