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The AP Celebrates Socialist Bank In ND

The Associated Press finally finds a financial institution they can admire:

In this photo taken Feb. 5, 2010, Eric Hardmeyer, president of the Bank of North Dakota, poses outside the bank’s steamboat-shaped headquarters near the Missouri River.

Economy prompts fresh look at ND’s socialist bank

By Dale Wetzel, Associated Press Writer Tue Feb 16

BISMARCK, N.D. – It has no automatic tellers or drive-up windows, doesn’t issue credit cards, and tends only a few thousand checking and savings accounts. Its only location is a glass, steamboat-shaped headquarters near the Missouri River, where the business moved from its original 1919 home in a former auto assembly plant.

The Bank of North Dakota — the nation’s only state-owned bank — might seem to be a relic. It was the brainchild of a failed flax farmer and one-time Socialist Party organizer during World War I.

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

Really? A bank with only one location and only “a few thousand checking and savings accounts” did all that?

Gubernatorial candidates in Florida and Oregon and a Washington state legislator are advocating the creation of state-owned banks in those states.

Candidates from what party? The Socialist Party?

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.

Well, with sterling references like that, no wonder the Associated Press is sitting up and taking notice.

(Michael Moore also touted the Veterans For Peace ‘Katrina Relief’ program, which turned out to be a total scam.)

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

Hardmeyer says he’s gotten "tons" of inquiries about the bank’s workings, including questions from officials in California, Michigan, New Mexico, Ohio and Washington state. 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."

Luckily, the inconventient fact that none of this is true didn’t stop the AP from writing a story implying that it is 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.

So it turns out that bank profits aren’t evil as long as they are made by a socialist state-owned bank.

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 said.

As we have previously noted, the Federal Reserve is also making record profits.

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.

These are pluses?

Besides, it should be quite easy to offer loans at a lower interest rate when you don’t have to pay the increasingly astronomical FDIC insurance rates.

The Bank of North Dakota was a cornerstone of the agenda of the Nonpartisan League, a farmers’ political insurgency spawned by anger about outside control of North Dakota’s credit and grain markets.

Founded in 1915 by A.C. Townley, who became a Socialist Party organizer after he went broke raising flax in western North Dakota, the NPL advocated state-owned banks to provide low-interest farm loans, along with state flour mills, grain elevators, meatpacking houses and hail insurance.

Supporters gained control of the legislature and the governorship within five years. The movement’s power quickly waned, but two of its state-owned businesses survived — the Bank of North Dakota and a state flour mill and grain elevator in Grand Forks

Hardmeyer said he… 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.

Certainly not.

In fact, it could be one of Mr. Obama’s next executive orders.

(Thanks to Confucius for the heads up.)

This article was posted by Steve on Wednesday, February 17th, 2010. Comments are currently closed.

16 Responses to “The AP Celebrates Socialist Bank In ND”

  1. Confucius says:

    From the Associated Press:

    Economy prompts fresh look at ND’s socialist bank

    By Dale Wetzel
    February 16, 2010

    BISMARCK, N.D. – It has no automatic tellers or drive-up windows, doesn’t issue credit cards, and tends only a few thousand checking and savings accounts. …

    The Bank of North Dakota — the nation’s only state-owned bank — might seem to be a relic. It was the brainchild of a failed flax farmer and one-time Socialist Party organizer during World War I.

    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.

    Hardmeyer says he’s gotten “tons” of inquiries about the bank’s workings, including questions from officials in California, Michigan, New Mexico, Ohio and Washington state. …

    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.

    “We think of ourselves as kind of a little mini-Federal Reserve,” Hardmeyer said. …

    The bank also pays no state or federal taxes and has no deposit insurance; North Dakota taxpayers are on the hook for any losses.

    Founded in 1915 by A.C. Townley, who became a Socialist Party organizer after he went broke raising flax in western North Dakota, the NPL advocated state-owned banks to provide low-interest farm loans, along with state flour mills, grain elevators, meatpacking houses and hail insurance. …

    http://news.yahoo.com/s/ap/20100216/ap_on_bi_ge/us_socialist_bank

    How silly.

    Here we were all bent out of shape over Obama nationalizing the banks, when North Dakota already did it in 1915–and with the help of the people!

    • Confucius says:

      BTW–John Hoeven (R) is Governor of North Dakota and a fomer president of the bank (1993-2000).

      Although a Republican, Governor Hoeven used to be a member of the Democratic-NPL Party between 1996 and 2000. He switched parties and left the bank in time for his gubernatorial run.

      Now, Governor Hoeven has declared his candidacy for U.S. Senate hoping to take the seat of retiring Byron Dorgan (D), who is also a member of the Democratic-NPL Party.

      It would appear Governor Hoeven is the Anne Heche of North Dakota politics–i.e. he’s a flaming RINO.

    • jobeth says:

      “BTW–John Hoeven (R) is Governor of North Dakota and a former president of the bank (1993-2000)

      “”Although a Republican, Governor Hoeven used to be a member of the Democratic-NPL Party between 1996 and 2000. He switched parties and left the bank in time for his gubernatorial run..”

      This statement and the rest of your comment scare and worry me more than even the bank story. And why I am never impressed with these people who jump parties. I don’t trust them. Either a politician is by nature a conservative,, or they,re not. Changing parties does nothing for their inner attitudes. It would be a very rare bird indeed who once in offices changes their colors…honestly.

      This is exactly what the tea party is standing up against. We as a people really have to change our lazy ways of voting now that the progressives have gain so much ground.

      We MUST research a politician’s whole life and career to weed out these “sleeper’ progressives. They are nothing more than plants into a republican party who wants to continue as before, undisturbed in the way they too have screwed the people over.

      As much as I wish Bush was still in there (as opposed to O’Balmy) he is part of the problem we have now…He was too willing to go along to get along. As things stand right now, I wouldn’t vote for him again…knowing what I know now of his allowing too many progressive friendly events.

      Far too many of us…me included…voted for the “R”.

      That “R” can’t mean much anymore. We have to be responsible voters from here on. We brought this stuff on ourselves, by being sleepy, lazy voters…and piously thinking we did our duty. We were wrong.

      The Republican Party, as a party, is only slightly better than the Democratic party. That this guy can so easily infiltrate the Repubs is positive proof of that.

      My criteria for my vote is how close a person sticks to the constitution and conservative fiscal behavior. And I for one will not vote for more than one re-election…no matter how good the person follows these plans. It seems once they get installed for too long, all sense of being a ‘servant of the people’ just flies out the window…on the wings of corruption.

      Thanks Confucius…We need to be reminded, and reminded again with each new election cycle to look at these people thoroughly, no matter what initial is following their name.

    • proreason says:

      Step 1: depose the marxists

      Step 2: clean house

      Step 3: make sure it won’t happen again for generations

      I don’t care if this Hoeven guy taps his toe under bathroom stalls. He can give us another R senator, and that’s too important to get squishy about him being a RINO. Now, if a sure bet conservative emerges, so much the better.

      Principles are great……but my god, look what is happening to the country.

    • jobeth says:

      I get your point Pro. And as an ultra emergency method to gain control again I agree. But allowing these RINOs to infiltrate the Republican Party has given us a Republican Party that has lost it’s conservative way.

      In the long haul..we have to start thinking differently. The Tea Party movement…the people who want the conservatives back in office has awaken and given boldness to people who have been lost in the shuffle for too long in party politics.

      Because of the rising up of the people demanding more conservatives in office even the Republican Party has stirred a bit. And the enemy…the progressive Democrats, are fighting us with everything they have. To me that means we are on to something. We aren’t there but so long as we don’t go back to sleep and mindlessly vote “R” we will succeed in weeding out all those sleeper RINOs. And that, to me, is the end game.

      We can only chose from who’s on the ballot. If all we have to choose from is a RINO and a Dem…of course vote the RINO. But lets get rid of the RINOs in the primaries. ;-)

      BTW…For the record I am NOT for any kind of third party. We just need to clean up the Repub party. I still remember the fiasco that allowed Clinton to get in.

    • Confucius says:

      Pro and jobeth,

      I understand the points you both raise in your posts.

      In 2008, I voted for John McCain (RINO-AZ) even though I hated his social policies and affection for gangs. Nevertheless, I voted for him principally as a vote against Obama. (I was also hoping Palin really would be just one heartbeat away from the presidency.)

      I would have preferred that the Republican leadership picked someone other than McCain. But how do I as an ordinary American affect the party leadership? The only power I have is to help the candidate they pick, but then it’s too late.

      Personally, I wish there wasn’t a party system. They always seem to evolve into entities interested only in themselves.

    • jobeth says:

      Confucius

      Thanks for your thoughts. I too voted for McCain for exactly the same reason you did. Wasn’t thrilled with him but I knew I DIDN’T want O’Balmy and I like you, was impressed with Sarah.

      I think we need a party system mainly because they are the oil that allows things to run. I fear a no party system would only break down. Too many people pulling in too many directions and killing any chance of getting anything done…but even so, we people are prone to form alliances…thus we would be back to some form of party system anyway.

      In my comment to Pro, I mentioned working harder in the primary portions of our elections to be able to get the best candidates in to stand against the progressives. In my experience I see far too little effort from the ordinary people during the primaries. That includes myself as well. We usually stay out of the fray until the actual election takes place. Then we are sometimes left with candidates like McCain that we vote for only as a lesser of two evils. We have to do better.

      These are exciting times…something we can look back on with pride…IF we continue to work hard for the founding ideals. ;-)

    • proreason says:

      This is a really important discussion thread.

      We all hate what has happened to virtually all of our politicians, who seemingly turn into RINO’s or worse the moment they set foot in Washington.

      But Rush, Mark Levin, Hannity, Laura, and almost all of the media conservatives (with the possible exception of Beck, who also seems to be backing away from his 3rd party position) are beginning to STRONGLY caution against making a statement (via 3rd party candidates), at the expense of Job 1, which has to be defeating the criminals who have siezed the government and are ruining our lives.

      That’s why I say Step 1 is defeating them, at any expense, even if it means holding our noses or worse.

      Then Step 2 has to be “instructing” the RINO’s and other slow learners that this country is going to be run by the people for the people, not by politicians for politicians.

      And Step 3 has to be re-educating the people who think it’s just idiot a or idiot b that everybody has to keep our guards up FOREVER, because these slimeballs will still be lurking around waiting to pounce on the country again and destroy it. The tool is already there, the Constitution, and I don’t think we can do better than that by any means. But we screwed up in the last 60 years by not demanding that our educators teach the basis of the country to our kids, and in letting the media become infiltrated by traitors. We have to be more vigilant in the future, or we will be back to the brink in just a few more years, when the slime balls figure out the next type of candy to tempt the brain dead among us.

    • jobeth says:

      Thank Pro.

      Your Step 3 says it all! All I can add to that is AMEN!

      We are so taken over by the infiltration, in all areas, but especially the schools. We MUST take our schools back for truthful history. These kids are the future of this country.

      And I do, I really do, understand taking back the Repub Party back via by voting in even the RINOs and insisting they tow the conservative line. As Confucius and I both did..when we held our noses and voted for someone like McCain…and I for one will continue to vote this way rather than a third party candidate who will only weaken the Republican Party. I understand the reasoning in that, is to not lose that “R” on the floor.

      I’m just tired of getting people like him paraded before us as our only option against the progressives. I want to get to the primary level and put pressure on the Party to put up true conservatives as candidates.

      For sure, this will all take a lot of time. So working with what we have at the moment…the RINO…yes…vote them in. But lets get rid of them in the long run.

      Actually, I think all three of us agree. I don’t think any one of us 3 is in any danger of supporting a third party candidate. We’ve been there…and saw what that did to usher Clinton in.

      Somehow we need to get this important information to our less politically inclined friends.

      I, just Wednesday, had a conversation with a truly wonderful friend…who lives as conservative life as I’ve ever seen, but votes Dem and bemoaned the loss of Murtha. She is from PA and proceeded to tell me how loved he is there and about the nice things he brought to them. Yes, I did remind her that he picked the pocket of every American to bring home that pork…and that her own pocket was being picked for other states etc. (nicely of course)

      She not only voted for Obama…but now doesn’t like his behavior. (ya think?) She is one who has to be reached slowly and surely. She is a product of the vote the ‘D’ crowd. Perhaps we can reach her and those like her. We also need to reach the vote “R” crowd to put pressure on the Republicans to put up better candidates.

      There is so much to be done on so many levels. And as you said, we must be careful not to weaken the Republican Party by strengthening a third party candidate just for ‘principle”. But as I said, I still feel strongly we have to really pressure the Repubs to realign themselves with conservatism and constitutional ideals.

      Currently I am fed up with the Republicans. But I have be fed up with my kids too. I plan on working to get both back in line. lol (Not everyone can be as perfect as me…LOL!)

    • Confucius says:

      Hi jobeth and pro.

      I am inclined to agree that if Washington didn’t have a party system, it would likely come to a standstill. If it we didn’t have to overturn all the liberals’ policies, this could be a good thing.

      I’m also inclined to agree that when a room has more than two people, there is a natural tendency to affiliate. So even if there wasn’t an officially recognized party system, one would come to exist de facto.

      All in all, I agree that the best and simplest way to retake America is to first retake the Republican Party. It would be easier to influence a handful of RINOs than to form an entirely new party that is successful.

  2. Very interesting.

    “The bank also pays no state or federal taxes and has no deposit insurance; North Dakota taxpayers are on the hook for any losses.”

    A ‘socialist bank’ playing a capitalist game on a playing field more than slightly tilted to its advantage with cumbersome rules that only apply to the other teams (banks).

    Obviously, it’s good to be a socialist!

    Although I’m pretty sure the taxpayers – as de facto stock holders – would prefer to also receive personal dividends, rather than just be “on the hook for any losses.”

    But, obviously, it’s good to be a socialist – as long as there’s other people’s money to appropriate.

  3. mr_bill says:

    I lived in ND for a bit, and it is well insulated from the economic woes the rest of the country is experiencing for a few reasons, none of which have anything to do with a socialist bank, as the story suggests.

    1. The economy is agricultural, people need grains and cereals regardless of the state of the economy.
    2. Mineral wealth, lots of coal, oil, and gas — and high quality at that.
    3. Conservative-mindedness: There aren’t real estate speculators (who wants to speculate on a house in Williston), people save their money and pay in cash, you won’t see many Mercedes, BMW, Lexus, or similar luxury cars (I don’t have anything against them, they just don’t sell there), and the people don’t think government should do everything for them
    4. The state doesn’t squander the taxpayers; money. The state has a rainy-day fund which requires a 75% majority of the state legislature to approve of an expenditure.
    5. Small population: there are about 650,000 people in the state, Bismarck/Mandan area has about 100,000; Minot has about 100,000; and Fargo/Moorhead has about 200,000, so 2/3 of the state population is concentrated in 3 areas which makes services easier to provide.

    • Liberals Demise says:

      Lived in Fargo for 5 years and I have to add that these are the friendliest, down to earth people I’ve ever met in my life.

    • mr_bill says:

      LD, I was in Minot for a bit then Bismarck. I spent some time “commuting” to Bowbells. I have to agree with you, I met some sincerely nice people there. Regardless of what people think of John Hoeven’s politics, you could walk in to his office unannounced and he would say hi and chat with you for a bit. I wouldn’t mind going back, reasonable housing prices, lower cost of living, high gun ownership levels, low crime rates, as long as you don’t mind the cold in the winters (which I don’t).

  4. Liberals Demise says:

    Does that make dingleBarry the sole “Loan Officer”?


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