Photo: Ameya Pawar (Rich Hein/ Sun-Times)
By Mark Brown, Chicago Sun-Times| July 10, 2020
A New Mexico state public bank would accept and invest public funds, not offering retail bank accounts but rather supporting community banks and credit unions.
Working with the George Soros’ Open Society Foundations, he thinks a public banking system handling depositors and public pension funds could fuel transformative change.
Former 47th Ward Ald. Ameya Pawar just signed a contract to write a book, which he is already starting to promote even though he doesn’t expect to finish writing it before January.
Normally, I’d place that in the category of putting the cart before the horse, but Pawar is trying to sell more than just copies of a book.
He’s really trying to sell an idea the public might have as much trouble wrapping its head around as I do: the need for government-owned and operated banks that would compete with the private banking industry.
You can see why he’d want to get a head start.
“Organize Capital: The Case for Public Banks” is to be released next spring by University of Chicago Press.
Pawar promises a “book about creating a network of state and local public banks to address inequality, poverty and finance in an inclusive community.”
It’s a typically ambitious pursuit for Pawar, who kept a promise to term-limit himself out of the Chicago City Council in 2019 after falling short in campaigns for governor and city treasurer.
As proud as he is of his aldermanic accomplishments — among them requiring paid sick leave and minimum-wage increases for Chicago workers — Pawar said he was limited in what he could accomplish as a legislator and wanted to work on something that could “move the needle” on inequality and poverty.
He thinks creation of a public banking system — in which local depositors and public pension funds join to fuel investment in their own communities — could fuel that kind of transformative change.
Pawar foresees government-owned banks acting in the public interest to provide economic development and serve other societal imperatives. By handling pension fund investment in-house rather than farming it out to Wall Street managers, he said he believes public banks would save billions of dollars in fees that could be redirected locally.
“Think about it this way: A public bank serves local stakeholders. A private bank typically serves distant shareholders,” Pawar, wearing a Nike T-shirt and a pandemic stubble, told me via Zoom.
“Why aren’t we using pension money in coordination with unions and government to invest in things that we care about? The reason that doesn’t happen is the rules around how pension money can be used and where it can be invested have been defined by Wall Street.
“We’ve allowed money into politics, but we don’t allow politics into money. We don’t allow our social justice or climate-friendly investment thinking into investment banking, but we certainly allow the investment bankers’ money into politics.”
The book will be the culmination of two fellowships Pawar has done since leaving office.
The first is through the George Soros’ Open Society Foundations. That’s paying Pawar to pursue his interest in “how we can reimagine public finance to finance the public good.”
I told Pawar that conservatives seem to see Soros’ money behind every rock, but it’s unusual to find a politician, even a former one, who will acknowledge Soros’ financial support.
“People always use him as the boogeyman,” Pawar said, attributing the antagonism to anti-Semitism. “To me, I feel like it’s important to say out loud I’m proud to be funded by his foundation to be doing the work around public banking.”
Pawar’s second fellowship is with the Economic Security Project (funded in part by Chicago Community Trust), which supports his exploration of guaranteed income for Americans and also relates to his interest in shrinking the nation’s racial wealth gap.
Pawar believes his study topics have converged serendipitously during the COVID-19 crisis with Congress acknowledging in the CARES Act the need to get cash ($1,200 payments) to the public while also demonstrating the difficulty of actually delivering that money in a country with so many people not using banks.
“I see the opportunity to expand the social safety net and make banking a utility,” said Pawar, who since his entry into Chicago politics has emphasized an admiration for FDR’s New Deal.
“What amazed me about the New Deal was this willingness to just try things,” Pawar said.
I ended the interview more open to the idea than when I started.
For those who might be curious, Pawar did not sound like someone eager to get back into the political game any time soon.
Asked directly, he said: “I don’t know.”
That might be a topic that really will have to wait until he finishes the book.