The smartest city in the world just made the dumbest choice imaginablehttps://nypost.com/2026/11/13/opinion/the-smartest-city-in-the-world-just-made-the-dumbest-choice-imaginable/Would you trust the city of San Francisco to run a bank? Evidently, 52% of the voters in San Francisco do.They signed off on Proposition B, a charter amendment that purports to set up a “public bank” run by the city.By now, you’re probably rushing to San Francisco with your life savings. But you’ll have to wait to open an account.Prop. B starts by creating a nonprofit shell company, a “Municipal Financial Corporation.” The nonprofit shell company will then be handed over to an oversight commission packed with political appointees.Everyone will figure out the actual bank part later.The person who pushed this concept for nearly a decade is Jackie Fielder, who sits on the Board of Supervisors for the city and is a card-carrying member of the Democratic Socialists of America.Back in 2017, when she was 22, she co-founded the San Francisco Public Bank Coalition, right after the Standing Rock protests against an oil pipeline in North Dakota.The green activists wanted to stop San Francisco from banking with anyone who financed the pipeline. Then they came up with the idea of building a parallel bank that they could control themselves.When the idea first came up, the city controller looked at the numbers and estimated that it could cost as much as $460 million over eight years just to open the bank.
That’s not a typo. Half a billion dollars to open a bank in San Francisco.Much of the bank’s early investments would be grants and forgivable loans. In other words, the startup costs would walk out the door, and probably never come back.The city controller noted that the sustainability of the bank “is not guaranteed.” In San Francisco, that’s usually the polite way of saying “good luck.”Fielder tried to fix the startup-cost problem earlier this year. She suggested taxing private financial firms.That’s right: She wanted to tax the banks to fund a competing financial institution run by the government. Even in San Francisco, that sounded too crazy for her colleagues in City Hall.“Plan B” was Prop. B, which asked voters to approve the idea of the public bank without spending any money on it (yet).To raise the startup costs, future politicians will have to either raid the city’s general fund, invent a new tax or admit the whole thing was just a socialist propaganda exercise.Even if San Francisco can find the cash, California law might still get in the way. Gavin Newsom signed AB 857 in 2019 to require any public bank to obtain FDIC deposit insurance.Reality check: No government-owned bank in the country currently has it. And San Francisco’s bank will never get it, because its stated mission is to fund projects based on their political appeal, rather than inconvenient things like credit and return on investment.The San Francisco Chronicle, the Chamber of Commerce, and Mayor Daniel Lurie, among others, all opposed Prop. B for the obvious reasons: It’s expensive, unfunded and hands political actors the ability to make loans that taxpayers will eventually eat.
The fact that Prop. B passed will not magically make those problems disappear. Yet San Francisco’s socialists treated their narrow win as some kind of mandate.The city already has affordable housing funds, small business programs, and actual credit unions that know how to underwrite loans.Prop. B would simply create a taxpayer-funded money pit, filled in by the city budget after cuts to other programs.San Francisco has never met a progressive experiment it didn’t want to fund indefinitely. The only thing more predictable is the eventual argument over who has to pay for it when the numbers don’t work.
