Local Investing

One of the questions are group has been asked since we first started educating people about how our economy works, why the crash started, and the problems inherent in a growth economy and Wall Street, is people ask us:  "But what can we do?  How can we get our money out of Wall Street?  Where can we safely put it?"  This is a good question because what of what right wing think tanks have helped accomplish in the last 30 years is the slow demise of pensions and move of retirement monies to IRA's which originally were controlled by the companies people worked for.   As a result they were invested in ways we had no control over, and were invested in Wall Street making all of us increasingly tied to Wall Street whereas 30 to 40 years ago only people with significant money were involved with Wall Street.  Thus when AGI crashed and the big banks were found to have bad investments the government argued it was necessary "for all of us" to bail them out.

Increasingly people have more control over there IRA's which has resulted in a whole growth of the socially responsible investing movement  (See details on the "Your Money" page.).  However, all investments are impacted by the ups and downs of the market place and thus those invested in SRI were not protected from the crash (although did tend to suffer smaller loses.)  Basically even SRI investments are still playing in the "NY Casino".  And for many who are trying to look at how to create social justice investments in: Microsoft, Starbucks, and banks just don't begin to create the world we truly want.  And yet if one simply puts one's money in a savings account they at this time produce virtually no interest.  We are all trapped with the fact that the debt in our money system creates annual inflation and if we cannot find someway for our savings to keep up with inflation we actually loose money!

We at JuSE think we have brought together several strands of what we have been learning towards an actual solution.   You will see in our vision statement that we see worker owned workplaces (cooperatives and collectives) as part of the solution, and that we see state banks as ways of investing in our communities rather than having the money leave the community.  We speak of the studies that show that dollars spent in locally owned stores circulates more money in the local economy than when spent in a chain.  We were inspired by Catherine Austin Fitts description of current capitalism as being like a tapeworm which starves the very thing it lives off of, and her description of a table to women living in TN where two were depositing their savings in mutual funds in Bank of America and it was sent to NY and lucky if they got 3% and two other friends were borrowing from BofA for their businesses and paying 10% interest to NY.  What's wrong with the picture she asks and what if we could help each other right in our community?

This made us get interest in Local Investing - or the LION's model from Port Townsend here in WA.  We were looking at this model the same time the movie Shift Change came out, and the same time that the wonderful 2013 spring issue of YES! Magazine came out focusing on worker owned work place.  We are aware from both those sources that newly starting Coops struggle to get the start up capital.   Marrying that with the LION's model we asked ourselves:  "What if local people started investment clubs of a dozen friends, as LION's suggests, but found worker collectives trying to get started providing services to ONES OWN COMMUNITY and funded those!  Here is Seattle we are very lucky that SLICE exists trying to get worker collectives off the ground.  We are just at the beginning of trying to explore this model but we feel it has the following advantages:

1) It allows peoples people to use Self Directed IRA's to move some or all of their money out of the stock market and Wall Street!  To no longer have to have our retirements in the hands of those we loath and distrust.  To leave the Casino and put our bets on things we believe in and in our own community.
2)  If we loan money to starting worker owned collectives they can borrow at 8% instead of 10 to 12% and we can get 8% interest instead of .4 to 3%.  It is therefore a win/win for both sides.
3)  This helps grow workplace democracy and the growth of worker owned business and more workers have input and control over the place where they spend most of their working hours.  (See Shift Change for a good look at what this looks like and the 50 year history of this in Basque Spain.)
4)  This allows those of us who want to leave mutual funds because we do not want to fund fossil fuels to stop funding the destruction of the planet.
5)  This allows those of us who already don't buy products from large corporations to stop giving any money to them!  This allows those of us who were part of Ocuppy to put our money where our hearts our.
6)  This keeps money in our communities and not have it keep going to the profit margin of banks and large corporations.
7)  Money spent locally circulates locally and strengthens the local economy.  Our investment in local business will not only be good for us and them but for the whole community.  (By the way if you are not a fan of cooperatives you can achieve much of the same economic results by just investing in small local investing.
8) The Securities Act prohibits people with less than 100,000 to invest directly in public offerings and prohibits financial advisors from assisting them in doing this.  Because these investments are in small business that are not "public" (ie do not have stock) the strangle hold the Securities Act made on local investment is broken.
9)  As we face a world of peak oil, climate change and other resource shortages our survival will increasingly depend upon what Transition Town movement calls "soft descent" -creating and providing the products and services we need in our communities and region.  This sort of economic development allows us to think about what we need and want in our communities and invest in it.
10)  This kind of investing has a face on it.  We are investing in relationships with people in our community who we believe in and who are contributing to our community.  As a result it makes it easier for businesses to be accountable for how they impact the community they are apart of.  It brings back accountability to local businesses.