The following is an excerpt from a Star-Ledger editorial published on September 11, 2016.
New Jersey deposits huge sums of money in commercial banks, and the banks profit by investing it around the globe, and taking most of the gains for themselves. That’s capitalism.
But what if New Jersey decided to use its money to build its own bank, to invest in local businesses, and to keep the profits to help address our fiscal crisis?
That, in a nutshell, is the first big idea of the 2017 campaign, and it comes from Phil Murphy, a Democrat and the only declared candidate for governor.
It is a promising plan, one that has worked well in North Dakota for a century. And it’s a welcome sign that Murphy is a serious candidate with innovative ideas about jump-starting this state’s lumbering economy.
Begin with the numbers: New Jersey has about $12 billion invested in big banks, like Wells Fargo and Capital One, according to Murphy. Of that, $1.5 billion is invested in foreign banks.
State and local governments have no control over where their money is invested. And if you think outside the box for a moment, that is nuts. Why should we not use the financial muscle we have, as any investor in a hedge fund would?
While community banks here are starving for funds, most of that money is invested outside our borders. Bank of America, one of the four largest recipients of New Jersey’s public money, made just three small loans to small businesses in in the state last year worth a combined $225,000, according to Murphy.
“This money belongs to the people of New Jersey,” Murphy said Thursday at NJIT in his first major policy speech. “It’s time to bring the money home.”