Author’s note: This article stems from my academic work on state constitutional postures, set out in Oppositional Federalism: A Taxonomy of State Constitutional Postures Under Authoritarian Capture, free to read on SSRN. For those interested, this article covers tier 2 opposition to authoritarianism, soft secession, when states reduce harm to their residents by building parallel institutions that make the state self-sufficient.
The New Deal was Franklin Roosevelt’s answer to the Great Depression, a broad wave of programs passed between 1933 and 1938. Some of those programs put millions of people to work right away, on government payrolls, building roads, bridges, dams, and schools. Others became permanent, like Social Security and the Tennessee Valley Authority, a government-owned electric utility that still powers millions of homes today.
We face a pile of crises now, and this time the federal government is itself the source. So as we address the acceleration of GOP-induced existential danger, it’s helpful to explore strategies which were successful in materially similar situations; this article explores one such strategy which we can call “The States’ New Deal.”
The first facet we will cover in the States’ New Deal is revenue generating publicly owned services. The largest publicly owned enterprise in the country is the one the founders themselves built. The Continental Congress made Benjamin Franklin postmaster general in 1775, and the framers wrote the post office into the Constitution itself, where Article I gives Congress the power to establish post offices and post roads. Today the United States Postal Service employs more than half a million people, delivers to every address in the nation, and pays for itself out of postage rather than taxes. It’s public ownership older than our nation and written into the founding documents.
Public ownership like this operates at every level of American government, from city halls to statehouses to federal agencies. Nebraska draws all of its electricity from publicly owned utilities, the only state where that is true, and its residents are not paying a premium for it: nationwide, residential public power customers pay about 13 percent less than customers of private utilities, and an independent Center for American Progress review found that publicly owned utilities have kept residential rates lower on average than investor-owned ones. Chattanooga’s city-owned utility built the first citywide gigabit internet in the United States, and when private carriers went to court to defend a state law capping the network’s territory, they won the cap but never stopped the network, which still serves the city today. A University of Tennessee at Chattanooga study valued that network at $2.69 billion in community benefit over its first decade, with 9,516 jobs created or retained. Austin and San Antonio own their electric utilities and move the earnings into their city budgets each year, the seventeen states that sell wholesale liquor keep the margin on it, and Ginnie Mae, a federal corporation, returns its profits to the Treasury.
North Dakota has done the same within the finance sector. The people of North Dakota have owned their own bank since 1919, as well as their own flour mill since 1922, the largest single-site mill in the country. North Dakota state law also keeps public deposits in their bank, which means that they can use their deposited funds as collateral for lending and borrowing, that their savings generate interest which also ends up back in the public coffers, and that the state can lend its own money to itself as loans to then build revenue generating public works projects. The bank has turned a profit every year it has existed, since Woodrow Wilson was president, and has never needed a bailout. In 2024 the bank contributed $335 million to the state budget.
This is already happening in cities and states across the country. In 2019 California became the first state to let its cities and counties charter their own public banks. In 2022 Philadelphia’s city council created the Philadelphia Public Financial Authority as a first step toward a municipal bank. In 2023 a San Francisco working group approved a plan to convert a city lending corporation into a public bank by 2028. In New York, a bill to let municipalities charter public banks has been introduced session after session, most recently in 2025. In Washington, a bill to create a state-owned bank has been introduced session after session, and the latest version carries into 2026.
Progress in this country has almost always started in the states: abolition, public schools, women’s suffrage, the minimum wage, the eight-hour workday, workers compensation, child labor limits, unemployment insurance, interracial marriage, same-sex marriage, cannabis legalization, paid family leave. Wisconsin created the country’s first unemployment insurance in 1932, three years before the Social Security Act established the same program nationwide, and one of the people who drafted the Wisconsin law was Elizabeth Brandeis, daughter of the Justice who that same year wrote the most famous defense of exactly this method. Dissenting in New State Ice Co. v. Liebmann, Louis Brandeis called it “one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” The first New Deal was built in the states and then made federal, and a States’ New Deal simply follows that sequence again.
Each of these institutions brings in revenue, solves a problem people actually have, and cuts the leverage the federal government holds over a state. A state that owns its power, its bank, and its hospitals can refuse a federal demand and keep the lights on. Self-sufficiency is leverage.
A publicly owned state health service could launch with a million paying members on the first day, every one of them already covered by the state as an employee, a teacher, a retiree, or a Medicaid enrollee, and every one of them paying at least a quarter less than they pay now. Build the hospitals to match, on the Tricare model the federal government has used for generations, and the state becomes insurer and provider at once, with no bills passing between them.
So how do we pay for it? That is what mayors and legislators always ask, and I come to those meetings with the answer ready. When a private company launches with customers already signed up, everyone can see the certainty of success. When a state does the same thing, people say the government cannot be a revenue stream, even though it already is one.
Municipal broadband starts with a customer base. So does a state health service, and so did the Postal Service, which covers its own costs out of postage. The Bismarck bank and mill send their earnings into the state budget. Washington state collects payroll premiums for paid leave and workers compensation instead of drawing on general taxes. A state that owns its bank holds its own revenue there, lends against those deposits, and keeps the interest inside its borders, as North Dakota has since 1919. Alaska banks a share of its oil money and mails every resident a yearly dividend.
My work crafting the oppositional federalism taxonomy consists of identifying and classifying the five constitutional postures a state can take under federal capture, each grounded in long-standing and entirely undisputed precedent.
Keep in mind that the tiers are categories rather than a linear progression.
Tier 0 is cooperative federalism, the ordinary partnership in which a state administers federal programs.
Tier 1 is uncooperative federalism, in which a state lawfully withholds its own personnel and money from federal work.
Tier 2 is soft secession, in which a state builds parallel institutions of its own.
Tier 3 is oppositional federalism, in which a state turns its sovereign criminal justice authority actively against federal overreach. This means ending the largely non-binding deference that local and state law enforcement authorities have extended towards federal officials who behave criminally.
Tier 4 is constitutional non-compliance. That is just fully breaking the rules when the situation becomes dire enough.
The program described here belongs to Tier 2, self-sufficiency through quality governance: the state builds something that works, residents see that it works, and the argument is won without being argued. Tier 2 is also what makes the others possible, because a state that already owns a working bank, grid, mill, or insurer has built the capacity every other posture relies on.
The same federal government that built Social Security is now controlled by people dismantling it, and waiting for that government to rescue its own creations is not a plan the evidence supports. The states keep the power to act, the Constitution protects the acting, and the record here shows, decade after decade, that the acting works.
We can get it done, it’s just a matter of educating others, activating ourselves, recruiting more folks to do the same, and repeating that process so that our preferred outcome becomes inevitable.
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CALL TO ACTION
Ask your city council and/or your state legislators to charter a public bank.
or
Copy paste/mail a printed copy of this article to your city council and/or your state legislators to charter a public bank.
A public bank holds government deposits and lends them out for public purposes instead of parking them with Wall Street. North Dakota has had one since 1919. It has turned a profit every year since, and in 2024 it put $335 million into the state budget. It’s proven, and it pays for itself.
Other places are already doing this. California lets its cities and counties charter public banks. Philadelphia created a public financial authority in 2022. San Francisco is converting a city lending corporation into a bank by 2028. Bills are pending in New York and Washington.
Four ways to reach them:
Call both the district office and the capitol office.
Email through the contact form on their legislative page.
Mail a printed letter.
Show up at a town hall or district office and ask in person.
Find your state legislators here.
Cover these in your own words:
What you want: a publicly owned bank for your city or your state, and their vote for it.
Why it matters to you. Your mortgage, your small business loan, what your city can’t afford to build.
That a public bank brings in revenue rather than draining the budget, and North Dakota has proven it for a century.
That other states are already moving on this, and yours should not be last.
For a bonus activity, take a picture/screenshot of what you send and share it on your personal social media or send it to a friend.
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Would there be any value to sharing the article you wrote today directly with my governor (Tina Kotek in Oregon)?
Yes! The emails, calls, social posts, letters matter and then "repeating that process so that our preferred outcome becomes inevitable." Because it works!!!