I am hesitant to write about the Occupy Wall Street movement because of how splintered it has become, and for fear that my assertions will not accurately reflect the entire picture. That said, I think it is important to consider what follows as an observation from a particular class and sector of society. Occupy Wall Street appeared (or appears, depending on perspective) to have two camps: the revival of a grassroots social campaign pitched against “what is” and then the passive participant-observers who act by donation and over coffee. Occupy Wall Street is just a convenient example. It so happens that the events leading to and the movement itself occupied the past several months and the primetime of my older teenage years. I bring it up, however, because of some things I observed at the Move Your Money conference this past weekend. We are on the cusp, at the crossroads, we have a blank slate, and so on. However we look at the situation in finance and the resultant discussions of class and equality, hunger and housing, etc., it is time to move forward as one, in a new fashion. The conference was made up of so many well-intentioned people hesitant to dive in. We have no leeway available to pretend we can operate two parallel universes, and leave the heavy lifting to a few. Now is what comes next, and what comes next is all we have. 2012 has been, so far, the hottest year on record in the United States. That is a tiny indicator if you are not listening, and an enormously loud affirmation if you are, that we are at one–or more–of those aforementioned crossroads.
What I noticed at the conference, mentioned earlier, is that people are still waiting for that “green light” to proceed forward in a new way. We make small concessions, or we do not, and make minor modifications, but few seem to take the dive. The Worcester Department of Public Works, for example, offers free recycling if you purchase the bins (a nominal $3 each). This is an excellent nudge to minimize landfill waste, but it is oh-so-tiny in the sea of things. Much of what I heard at the conference was the open-ended question of, “how do I invest in my local community and still maintain the security and returns of my existing portfolio?” The funny thing about that question, which should almost be an embarrassment at this point, is that evidently there was very little security in the first place. The first step to reforming this question is to debunk those two concerns: security and returns.
Security is hard to define. The Full Faith & Credit of the US Government has been shaken slightly of late, even in the broader public’s view. For the more severe, the “privatization” of the Federal Reserve shook that notion before it even slipped their lips. The security of a publicly traded company is moderately valid, as one could say that the more eyes on a company, the safer the bet. This, in my opinion, is bogus as well. Enron is one very large example. I do not mean to say that fraud is built into the system, just that the illusion of “security” ought to be reconsidered. The fact that we even have to seek a return on our money in order for it to remain as valuable as it is at this exact moment is even questionable.
Returns are more difficult to discuss, because they do not have to do with misinformation or faulty perception. Returns simply are financial returns. I am confident (though I do not expect agreement) that this “security” investors seek in our system is faulty, but I cannot argue that 7% is not 7%, or that a loan at 3% is superior for the borrower, in most cases, than one at 17%. The issue of an expected and necessary return brings to question the social expectation that money is edible in the end. We, obviously, know that is not the case, but we act in awful union with it anyway. The shift, however, cannot just be the acceptance of social return as a positive thing. Many people believe in this and many companies act while waving their unique flag of CSR–corporate social responsibility–while supporting many necessary foundations and projects. Unfortunately, there are a lot of investment opportunities, large and small, that are forgotten because the return takes a slightly different tact. A thriving downtown area in any small community increases the desirability of that space. Higher property values, a tighter knit business scene, more competition-better product-nicer parks-cleaner streets-and so on are all related to the amount of capital input in a town. Those returns are collective. You cannot claim that clean sidewalk as your own, nor could you take the explicit responsibility for having a town center that is a hotspot destination because of its unique charm and progressive ideals. You can, however, claim ownership of the unit, along with your neighbor, and her neighbor, and so on. I do not, at all, bash “me” thinking. I still admire and encourage the ideal of rugged American individualism, of individual success, but I think it can coexist with “we” thinking. Local investment is likely not going to get you the same fiscal returns, but there is no replacement for the power of the group. Yes, making money work as a tool for individual needs is necessary, but the burden can be shared. Not everyone can run their own coffee shop, corner store, boutique clothing shop, accounting firm, and do the landscaping, alone. We welcome a sharing of the burden in so many ways, so why does our money have to be so exceedingly stuck in the corporate world? Find someone who lives in Amazon.com and I will be pleased to change my opinion, but for every resident ordering on the online Wal-Mart, or simply shopping at Wal-Mart, there is a yearly expenditure going nowhere but away. Convenience of that sort has a ridiculous price.
To unify this piece of writing I would like to close with this: the Occupy movement brought out those people in the $500,000 homes with the “We are the 99%” signs (good people/all kinds of people!) and simultaneously exposed those who gave up jobs, status, relationships, and fought for what they wanted. I am not making a value judgement on who is better. In fact, I want nothing of the sort, and I sincerely hope that people will abandon any kind of debate over who is real and who simply mouths off. The important piece is that each and every one of us has a place, and that niche is forgiving, accepting, and infinitely flexible. In order to proceed, however, we must bridge that gap and collectively dive in.
Here is a link to a swath of unedited notes from the conference, compiled by a few of the participants. This will likely change over time. There is some valuable information here for the interested party. I will write a proper recap of the conference later this week (this was supposed to be it but I digressed).
Independence Day is a fitting time to reflect on the nation’s fiscal conundrum, and the steps necessary for recovery. I use the word “recovery” with reservation because we must not simply return to our previous norm. This recovery is a true recovering and a rewriting of our modus operandi — a fiscal declaration of independence. This time, however, everyone is involved. Money, in all forms, can no longer be a scary concept with too many silent intermediaries and graced with too little collective understanding.
The regulatory framework that people function within (and without) in the United States is not responsible for how educated or engaged the public is about policy and why things happen as they do. For example, our most recent financial crisis, no matter how publicized, is still relatively obscure in its mechanics for many Americans. How are we expected to sashay boldly out of this if, as a collective body of citizens, we do not know the right or left, front or back, or even the general shape of our own personal financial crisis? The amendment to the JOBS Act, known as the CROWDFUNDING Act, is a minimal step towards simplifying and rebooting the system in favor of the smaller player (a text I have been working with a lot lately). What good will it do, however, if we do not understand it or even why it matters? I do not mean to suggest that ignorance is the norm, simply that we all have a lot to learn in order to make positive about the aftermath of the 2008 Wall Street events. A good starting place for me was watching the 2010 film Inside Job. Again. And again. I do not mean to thrice slay the slain on this issue, as the media and mood has already moved on. It really is, though, an opportunity and a great catalyst for good conversation.
On July 14th and 15th, at Smith College in Northampton and in Florence, respectively, there is a conference called Move Your Money from Wall St. to Main Street. The agenda has a broad swath of events and discussions that address questions about localizing investment, solar, crowdfunding, and education. Registration before the 6th receives a 20% discount. Michael Shuman, the author of Local Dollars, Local Sense, will be in attendance as a speaker.
In the interest of this holiday and my own enjoyment I am going to end here. I know this is just a stub, but I wanted to be able to mention the conference before the 20% offer expired for the public. I appreciate your patient reading, and would be tickled to hear of any responses or leads (things that I must learn about in order to write more) in the comments.
***EDIT: I realize the link to the conference page was broken, but it is now fixed. I apologize for any inconvenience!***
I take this title from the recent book by Portland, Oregon, based David Wolman. I read it recently and a whole barrage of other pieces of writing about the current state of money, what money even is, how we remedy it, and what it is that might actually need remedying. His book is an excellent example of a broad discussion of the state of our monetary union (from a physical standpoint) and how that effects the economy as a whole. I highly recommend it for its content, though I do not necessarily align myself with the author’s views.
Though this might seem a departure from a CDFI or the principles of microfinance, money is (obviously) at the heart of this discussion. And though most modern transactions may never involve physical money, our system still relies on it. I use my credit card for every possible transaction because it gets me one step closer to an airplane ticket back home. We have already departed considerably from what currency originally meant. What David brings up is that physical money has a depth of complications that may be a detriment to our world economy. I will not hope to reiterate what he says, but I do encourage the read. In fact, I encourage any reading on the developing world of alternative currencies.
Ultimately, this discussion relates to a reform of the status quo. Building out a microfinance driven CDFI in any small community is a challenge to that status quo, as is the broader discussion of what money actually means to us as people. It is important for me to consider the amazing possibilities of a total reform of physical money, because the slate is blank if we so elect it. As users of barter/trade/currency/etc. we choose how to assign value and how to act accordingly. A local example is Worcester Time Trade, which uses the principle of time investment as value. Participants build up equity in “hours” and may expend them in exchange for another’s time doing any task. A regional example of a currency shift is BerkShares, an entirely new currency developed for the Berkshire region in Massachusetts. They quote Wendell Berry on their website, from his book Work of Local Culture.
A good community insures itself by trust, by good faith and good will, by mutual help. A good community, in other words, is a good local economy.
That may seem like yet another departure, but it is really just a distillation of so many disparate philosophies. This includes farmer’s markets, Clark’s involvement with Worcester and the Main South, food cooperatives, community supported agriculture, and so many others. To develop a successful financial model for era 2.0, we have to abide by and incorporate these ideals. The possibilities are endless.
I will try, over the course of my LEEP Project and beyond, to unify and shape these driving philosophies so I may concoct a best approach for “the next step.” I am fully engaged back in Massachusetts and will be writing with frequency. I apologize for the long delay.
I have been stuck out West longer than anticipated, so it is easy to forget I am still supposed to be a student. Tonight I will be burning the midnight oil simply to remind myself of the work still ahead. LEEP is enabling me to continue on a project I began when I first came to Clark. And in a fit of naive exuberance, I committed to really achieving something through this project by graduation.
This summer I will take those first concrete steps and assemble a working business model for a community development financial institution in the Main South. I am working simultaneously with the Hopkinton, Massachusetts, Chamber of Commerce to advance the framework to support the development and sustainability of small business. The harmonizing aspect is that I will assist in creating a crowdfunded microfinance framework to nurture the aforementioned small business development.
This is important for the research and development of my own idea because it sets me down right in the path of the oncoming JOBS (Jumpstart Our Business Startups) Act, which, though passed, still needs to mature. The SEC (Securities & Exchange Commission) has 280 days from April 5th to establish the rules and regulations that will direct this law. After chewing through pages of considerable density, I am flabbergasted as to how this was supposed to simplify start-up fundraising. If I get my own act together, I will be on the early side of the new era for small business development.
I like to consider this summer internship in Hopkinton to be like training wheels. I get to try some of my own ideas on someone else’s turf. I will be furiously scribbling in two notebooks simultaneously. All summer long.