As Chicago gears up for round two of its first contested treasurer’s race in 20 years, Ald. Ameya Pawar, 47th Ward, said he wants to tackle income inequality in the city by building a public bank.
Pawar finished second in February’s election for treasurer. Since no candidate won a majority of votes, he will face first-place winner state Rep. Melissa Conyears-Ervin in a runoff election next month.
Before voters head back to the polls, Pawar stopped by the Morning Shift to talk more about his plans for a public bank, his first potential move as treasurer and how he would work with the next mayor.
On how the proposed public bank would work
Ameya Pawar: [Right now], we have an $8 billion portfolio that the city manages, the treasurer manages for the city, and then you have $25 billion plus in pension assets. Now, on the city portfolio side, we take these dollars that come in through various grants, federal dollars, state dollars, and we deposit them in J.P. Morgan or Bank of America. They then use those dollars, the banks, and either generate interest for themselves and/or lend to things like immigrant detention centers or, in some cases, homebuyers.
Imagine if you were to democratize that $8 billion that we currently put in J.P. Morgan and put that to work in our communities through our own vehicles like a public bank. So, rather than paying massive interest rates on bond deals to Bank of America, imagine if we could self-finance the same kinds of infrastructure like roads and bridges.
Imagine if we could refinance student loans at a local level, draw young people into this city, refinance their loans at a lower rate and tie that to residency. Imagine financing affordable housing, something that the big banks currently run away from. ... So, imagine if we democratize that $8 billion and put it to work for ourselves in our communities to advance real social and racial and economic justice.
On his first possible steps as treasurer
Pawar: Well, I think first thing is one, publishing a report immediately for taxpayers to see how much we're spending, managing our dollars on the pension side, and how many dollars we are spending for these big banks, the municipal depositories, to manage city dollars. I'll give you an example: A lot of the dollars on our pension side, some of these big hedge fund managers charge us 1 percent to manage those dollars.
That sounds like a small amount of money, but that's one percent whether you're up or down. That's 10 percent compounded over 10 years. Over 30 years, that's 30 percent compounded. No one would give away a third or more of their principal up or down, but we do that because we don't actually take a deeper dive. We're promised these massive returns from investment bankers, and they're getting ahead. Meanwhile, the vast majority of pension funds, including consumers, are being left behind. This is something that I want to document and produce for the taxpayers to say there is a better way to do this.
On collaborating with the next mayor
Pawar: [As alderman], I beat the machine eight years ago, but then I passed over a dozen pieces of legislation, including guaranteed paid sick leave, raising the minimum wage, combatting wage theft, and then on the government reform side, empowering the inspector general and creating the Independent Budget Office. I did this by building relationships with my colleagues, building relationships with the mayor's office and not making this an either/or.
There are times where we're going to work together, times where we are going to work against each other. But like most people who go to work, you have to get up and go to work the next day and work with people who like you, who don't like you, some people steal your ideas, but that's how people work in the private sector. This is how government should be working, and none of my approach will change as treasurer. I'm going to extend a hand out to anyone who wants to work with me.
This interview was edited for clarity and brevity by Libby Berry. Click play to hear the full conversation.