Michigan gubernatorial candidate (and Lansing Mayor) Virg Bernero wants to establish a state run bank in Michigan. The only state that currently has a state-run bank is North Dakota:
"Hundreds of job-creating projects are still on hold because Michigan businesses and entrepreneurs cannot get bank financing. We can break the credit crunch and beat Wall Street at their own game by keeping our money right here in Michigan and investing it to retool our economy and create jobs," Bernero said in a release.
If Michigan had established a state-run bank 90 years ago like North Dakota did, it probably would not be considered a big deal. Republicans and Democrats would both embrace it, especially if it had done as well as the one in North Dakota. As an example of what a big deal it's not, the current Governor of North Dakota is a Republican named John Hoeven (he's running for the U.S. Senate now as well), who was the CEO of the Bank of North Dakota for the 7 years preceding his election as Governor. Running a socialist bank didn't hurt him when he ran as a Republican in a state that voted for George W. Bush by margins of 27% (2000) and 25% (2004), respectively.
The state-run bank of North Dakota has been successful, turning a profit of $58 million in 2009 alone. If another state were to establish one now, it probably would not be nearly as good or bad as people would expect. It's not going to solve a huge budget shortfall overnight, but it is one proactive approach in a time when cash-strapped states don't seem to have many. options
It's an interesting campaign proposal, but private banks will probably put up huge fight, and it would simply be too controversial for many people to throw support behind it. It also could be something that works in North Dakota, but would be a disaster elsewhere else. It deserves a look, but Michigan should not be expecting it any time soon.