Press "Enter" to skip to content

Carl Person: ‘Creating State Banks the Libertarian Way’

Libertarian Idea for Creating Jobs Developed
during Day of Joint Executive Meetings of LPWI and LPMN in St. Croix
Falls MN on 10/1/11

Carl Person, Candidate for Libertarian Party Nomination for President)


New York,
NY, October 2, 2011.
Carl Person, Candidate for the Libertarian
Party’s nomination for President, made the following statement today
as part of solving the nation’s unemployment and economic problems:

Setting up State Banks in
the 50 states can and should be endorsed by Libertarians across the
I figured out the way it can and should be done while meeting
with and speaking before the jointly held Executive Meetings of the
Wisconsin and Minnesota Libertarian Parties, held yesterday in St. Croix
Falls, WI. My repeated requests to speak at Libertarian meetings throughout
the U.S. has been very productive in developing Libertarian ideas for
creating jobs and improving the economy.

The only state bank in the
U.S. is the Bank of North Dakota ( ), which has at least significantly
contributed to North Dakota’s envious position of being solvent and
with a high rate of employment, and few if any economic problems, and
probably the highest-rated state from an economic standpoint.

The BND receives all moneys
paid to North Dakota (to give it a platform for lending money through
the nation’s or should I say Federal Reserve’s fractional banking
system) and performs these banking programs for North Dakota [ ]:

Farm/Ranch Financing Programs

Business Financing Programs

Government Guaranteed Loans
for Lenders [under my plan this would become Privately-Owned Bank Guaranteed
Loans for Lenders]

Community Water Facility and
Health Information Technology Funds

Residential Real Estate Financing

Bank Stock/Trust Preferred
Securities Financing Loan Program

Most of the banking activities
would be with other banks in the state (called “participating loans”),
rather than making “Direct Loans”. The only direct lending
authority for the BND (as granted by ND statute) is: (i) purchase or
acquisition of bank stock or the formation of a bank holding company;
(ii) acquisition or refinancing of farm real estate by qualified individuals;
and (iii) assistance with post-secondary educational costs (i.e., student
loans). All other lending is through participation through a lead financial
institution (such as a bank, savings and loan, credit union or Farm
Credit Services).

Now, back to making state banks
work the Libertarian way.

Instead of having the state
own the state bank, I proposed that the state license existing or newly
created commercial banks (all nationally charted and members of the
Federal Reserve System) to perform the above functions, or whatever
combination of functions is desired, and that the licensing be available
to any nationally chartered commercial banks.

Each of the banks would be
privately owned, and in the case of “state banks” at a county, city
or town level, which I also would like to see, the banks should be locally
owned and not part of an interstate or national group of banks.

At the state level, let’s
assume there are 10 commercial banks licensed by the state to perform
the state-bank functions for the state. These 10 banks would compete
with each other for obtaining state deposits of money by objective analyses
of their respective performances of the state-bank functions, updated
regularly including the percentage of state money they are entitled
to receive in deposits. The competition would create the lowest
cost for performing the state function, and the risks of loss would
be entirely on the private owners of the respective “state banks”,
and there would be no “too big to fail” potential, especially when
expansion by the state banks into other states is prohibited.
Lending across state lines is permitted by BND but only when the lending
benefits North Dakota’s interests.

If state banks work out so
well for the state, why not have “state banks” for counties, cities,
towns and villages? I see no reason why not. One of the competing (privately-owned)
state banks could offer “state bank” services in political subdivisions
of the state, but I would prefer that the state banks for the political
subdivisions be owned by local interests, to make them more knowledgeable
about and responsive to the banking needs of the local political subdivision.
This locally-owned requirement would probably result in several regional
banking groups to compete for the deposits of the regional political

The effect of having state
banks throughout a state, and throughout the 50 states, would create
competition within the Federal Reserve banking System and enable business
and potential new business to be funded at realistic interest rates
instead of the usurious, prohibitively expense (often) 31% credit card
interest rates that many small businesses are now paying to borrow money
for their small businesses.

Yes, state banks can be an
important Libertarian plan for reducing government regulation, increasing
private ownership of government functions, reducing interest for all
businesses, large and small, and promoting jobs and economic growth
in the United States.

Please invite me to speak at
more Libertarian meetings.

Press discussion on next 1-1/2

Press and Huffingtonpost report on 2/16/10, amended 4/18/10,at

(AP) The Bank of
North Dakota – the nation's only state-owned bank – might seem to be
a relic.

But now officials
in other states are wondering if it is helping North Dakota sail through
the national recession.

Gubernatorial candidates
in Florida and Oregon and a Washington state legislator are advocating
the creation of state-owned banks in those states. A report prepared
for a Vermont House committee last month said the idea had "considerable
merit." Liberal filmmaker Michael Moore promotes the bank on his
Web site.

"There's a
lot of hurt out there, a lot of states that are in trouble, and they're
trying the Bank of North Dakota together with this economic success
that we're having right now," said the bank's president, Eric Hardmeyer.

*.*.* North Dakota
has the nation's lowest unemployment rate at 4.4 percent, soaring oil
production and a robust state budget surplus – but Hardmeyer says the
bank isn't responsible for the prosperity.

"We are a
catalyst, perhaps, or maybe a part of it," he said. "To put
this at our feet is flattering, but it frankly isn't true."

The Bank of North
Dakota serves as an economic development agency and "banker's bank"
that lessens the loan risks of private banks and helps them finance
larger projects. It offers cheap loans to farmers, students and businesses.

The bank had almost
$4 billion in assets and a $2.67 billion loan portfolio at the end of
last year, according to its most recent quarterly financial report.
It made $58.1 million in profits in 2009, setting a record for the sixth
straight year. During the last decade, the bank funneled almost $300
million in profits to North Dakota's treasury.

The bank has the
advantage of being the repository for most state funds, which can be
used for loans and occasional relief for private banks that need a jolt
of cash during sluggish credit markets.

"We think
of ourselves as kind of a little mini-Federal Reserve," Hardmeyer

The state earns
roughly 0.25 percent less interest than state agencies would get from
a commercial institution. The bank also pays no state or federal taxes
and has no deposit insurance; North Dakota taxpayers are on the hook
for any losses.

*.*.* Bollingberg
said the idea of other state-owned banks would also likely arouse opposition
from private banks that wanted to keep their share of state deposits.
"Because the (Bank of North Dakota) has been here so long, no banks
know what it was like to have those deposits," he said.

Hardmeyer said
he, too, was always doubtful others would take up North Dakota's model,
but now he's not so sure.

"When I see
what's going on around the country, it's not quite as far a leap as
I thought it once was," he said.

Also, on 3/15/11,
Gary Anderson of stated, at

So before you Tea
Party people get your panties in a wad, you need to understand that
a state bank is not a socialistic scheme.

In fact, it actually
is a method of funding capitalism below the crony capitalist level.
We already have a sort of socialism, but it is a corporate, fascistic
type of socialism, where the financial community is actually much larger
in terms of cash flow than is the real world community.

And that financial
community is sucking out as much money as it can from the smaller real
economy daily.

Here are links to some of
my more recent press releases (with 2 in red being state-bank related):

Jobs in Wisconsin – Outline for 10/1/11 Presentation

Ron Paul: Why Do Congress and Obama Refuse to Create Millions of Jobs
at No Taxpayer Expense?

Asks Community Colleges to End Unemployment by Offering Needed Vocational

Person Calls for National Convention of Colleges and Universities to
Overcome Threatened Obsolescence

Day – September 17, 1787 – What Went Wrong?

Banks as Competition for "Too Big to Fail" Banks

Is No Job Shortage

Points – Obama's American Jobs Act

Presidential Debate Offered No Specifics for
Job Creation

Candidate Creates 10,000,000 New Jobs

Candidate Creates 10,000,000 New Jobs

for Carl Person's Candidacy

Should Reach Out to Free State Project, Porcfest and Similar Organizations

Million New Jobs Waiting for Trained Applicants

Platform as Libertarian Party 2012 Candidate for President

Person for President 2012 Campaign Seeks State Coordinators

Needed to Stop the Destruction of Our Economy

Students Wanted as Campaign Volunteers

the U.S. Government Stops Enforcing Law, the NYS Attorney General Becomes
the Nation's Chief Law Enforcer

About Post Author


  1. Dr. Tom Stevens Dr. Tom Stevens December 18, 2011

    The Governing Board of the Objectivist Party has voted unanimously to terminate the membership of Carl Person for exhibiting Socialist Tendencies in his campaign to obtain the Libertarian Party’s Presidential Nomination in 2012 and exposing his past Green Party affiliations and stands on issues:

  2. Questions Man Questions Man October 7, 2011

    This is a libertarian way?

  3. Jennifer Schulz Jennifer Schulz October 5, 2011

    Wow. Sounds like Person doesn’t know what a credit union is.

    Look up “Libertarian” while you’re at it, Carl.

  4. Thomas L. Knapp Thomas L. Knapp October 5, 2011

    BS @4,

    “Any libertarians here agree with Carl Person on this?”

    I can only speak for myself, of course, but no, I don’t — any more than I agree with Libertarians who want to get government’s nose further into education with voucher and tax credit schemes, etc.

  5. Barry Silverwater Barry Silverwater October 5, 2011

    Any libertarians here agree with Carl Person on this? Anyone?

  6. Barry Silverwater Barry Silverwater October 5, 2011

    Coming next:

    Collective state farms the libertarian way?

  7. Common-Tater Common-Tater October 4, 2011

    Doesn’t seem too libertarian to me

  8. Darryl W. Perry Darryl W. Perry October 4, 2011

    How does Mr. Person reconcile his position of creating 50 central banks with the LP platform?

    2.5 Money and Financial Markets
    We favor free-market banking, with unrestricted competition among banks and depository institutions of all types. Individuals engaged in voluntary exchange should be free to use as money any mutually agreeable commodity or item. We support a halt to inflationary monetary policies and unconstitutional legal tender laws.

Comments are closed.