Dale Wetzel/AP Photo
The Bank of North Dakota headquarters in Bismarck
The $500 billion that Congress sent to the Treasury Department to stimulate the economy may be gathering mold in Steven Mnuchin’s backyard, and the PPP funds it sent to banks to distribute to small businesses may or may not have trickled down to Main Street, but at least there’s one bank with a uniquely stellar record of helping small-scale enterprises.
It’s America’s one publicly owned bank—the Bank of North Dakota, established in 1919 by the state government, then headed by onetime socialist and forever leftist Governor A.C. Townley, and never yet privatized in the 101 years since.
The Bank is the reason why North Dakota has distributed more funds per worker (more than $5,000) through the PPP program than any other state, according to a survey conducted by The Washington Post.
In normal times, the Bank doesn’t issue individual or retail loans (though it does issue student loans). But it partners with the state’s privately owned local banks on small-business loans and provides guidance to those banks and local businesses when they reach out to global markets and financiers. The help the Bank has given to the state’s local banks has also enabled them to remain vibrant and resist absorption into the national mega-banks. For that reason, North Dakota has more banks per person than the other 49 states.
As soon as Congress established the PPP program, the Bank put local banks in touch with the Small Business Administration and various political leaders, and, the Post reports, bought some of the local banks’ loans to spread out the risks and the costs, thereby enabling those banks to keep on lending. In the rest of the United States, by contrast, PPP funds trickled down through private banks that had no larger partner willing to offset their loans or help them get and distribute more adequate levels of funding.
The lesson of North Dakota, apparently, is that the best way to help small-scale capitalism is through large-scale socialism.
