Legalize Local Investing
By Michael Shuman / change.org

I personally support the spirit of Occupy Wall Street, especially the spotlight it has cast on the shocking level of inequality in our country. But the movement oddly conveys a very mainstream message that Wall Street can and should be fixed. Just clean up our existing financial institutions – make them more accountable, honest, transparent – and all will be well. Really?

I think it would be smarter to end our relationship with Wall Street. Just say “no.” There’s another 99% that begs our attention – the 99% of Americans who are not permitted to invest in local small business. A growing body of evidence suggests that these are the businesses that are essential for growing jobs, incomes, equality, entrepreneurship, smart-growth, and green communities.

If we were to legalize investment in local businesses, including co-ops, farms, and community investment funds, Wall Street would be history. And the good news is that it’s on the verge of happening.

WANT TO HELP LEGALIZE LOCAL INVESTMENT? Then...

For decades, we’ve lived under an oppressive system of investment apartheid. The 1% who are millionaires (known under federal securities law as “accredited investors”) are free to invest in anything they choose. With the referees in their back pockets and all kinds of home-court advantages, it’s easy for them to win the wealth-accumulating game. The other 99% of us are stuck with the slim pickings of the Fortune 500 public companies listed on Wall Street – the companies least connected to the well being of our communities.

Before small businesses can accept investment from the 99%, they have to spend many tens of thousands of dollars on legal, accounting, and government filing fees. While most of us would like to invest in small businesses in our community, practically speaking, securities laws make it impossible.

This is a far more extreme big-business bias than exists in banking, where we can easily move our money to local banks and credit unions. Worse, we have four times more money in Wall Street investments – stocks, bonds, mutual funds, pension funds, and insurance funds – than we do in banks We are the ones fueling the multinational companies we distrust.

If we could overhaul securities laws that we enacted during the early Jurassic Period, local businesses could be fabulous investments. They are the most important job producers in the economy. They account for more than half of private sector jobs. They are increasingly competitive – so much so that their their share of the national workforce actually growing. Stunningly, sole proprietorships are three times as profitable as C-corporations.

For the first time in decades, reform is finally possible. A remarkable coalition has emerged bringing together leaders of the Tea Party and the Obama Administration. They agree that investment apartheid should be abolished. Republican Representative Patrick McHenry of North Carolina is leading the charge in the House to legalize small businesses raising money through large numbers of small investments (aka “crowdfunding”), with minimal paperwork, for companies raising less than $1 million. Recent changes in his bill (HR 2930, The Entrepreneur Access to Capital Act) actually make it very similar to reforms President Obama proposed in his jobs package in September.

On November 3, HR 2930 passed the House with overwhelming support (407-17). But passage of crowdfunding legislation is still uncertain. Senate Republicans may be afraid to support anything that Obama has proposed as part of his jobs package. And many Democrats are defending the status quo, because they are understandably afraid of deregulating the financial industry. What Dems don’t appreciate, however, is that the key to Wall Street reform is to ratchet up regulation at the top and loosen things a bit for the 99% at the bottom.

The Occupy Wall Street protestors could make a critical difference here. They – and we – should occupy Congress until they legalize local investment. Once that occurs, we’ll see thousands of small companies owned by their customers. We’ll see the emergence of local stock exchanges that will provide investors with liquidity. We’ll see mutual funds with local securities (none exist today), and local pension funds.

Consider what happens when the first trillion dollars of our long-term savings move from Wall Street to Main Street. Stock prices of giant multinational public companies will go down, and the price of local business shares will go up. A stampede of investors moving their money could follow. We might quickly see the largest transfer of capital in human history, from increasingly untrustworthy Fortune 500 companies to the local businesses we care about.

Millions of Americans have already changed their buying habits to buy local. Now’s our chance to invest locally too! My dream is to transform the place into a quaint Big Apple tourist site, where we can pay our respects to the mistakes of the 20th century that we thankfully stopped making in the 21st.

 
What To Do
LEGALIZE LOCAL INVESTMENT
Yours,

Michael Shuman


Michael Shuman is director of research for Cutting Edge Capital, director of research and economic development at the Business Alliance for Local Living Economies, and a Fellow of the Post Carbon Institute. He is the author of Local Dollars, Local Sense: How to Shift Your Money from Wall Street to Main Street and Achieve Real Prosperity, forthcoming in 2012 from Chelsea Green and Post Carbon Institute.
4.0 · 1
What's Next
Related
Load Comments
Trending Today
When You Kill Ten Million Africans You Aren't Called 'Hitler'
Liam O'Ceallaigh · 26,069 views today · Take a look at this picture. Do you know who it is? Most people haven’t heard of him. But you should have. When you see his face or hear his name you should get as sick in...
The 'Super Bowl' Ad We Should Have Seen
2 min · 4,745 views today · Watch the #BigGame commercial the NFL would never air. Get involved by contacting the Washington Professional Football Team, the NFL and the Washington Post:  DC...
To Fall in Love With Anyone, Do This
Mandy Len Catron · 2,818 views today · More than 20 years ago, the psychologist Arthur Aron succeeded in making two strangers fall in love in his laboratory. Last summer, I applied his technique in my own life...
This Painting Captures a Disturbing Truth about the History of Our Education System
2 min · 2,657 views today · The truth is chilling. But it is a history we should never forget. This is a clip from the feature documentary "Schooling the World." Thanks to the generosity of the...
"Desert Goddess" Remembers Arizona's Glen Canyon
7 min · 2,314 views today · In this excerpt from the award-winning documentary DamNation, filmmakers Ben Knight and Travis Rummel interview the "desert goddess," Katie Lee. When the Glen Canyon Dam was...
What You Might Notice If You Forgot Your Phone For a Day
2 min · 2,292 views today · There is a moment happening right in front of you, right this second, and you just might be missing it
John Pilger on ISIS: Only When We See the War Criminals In Our Midst Will the Blood Begin to Dry
John Pilger · 1,683 views today · In transmitting President Richard Nixon's orders for a "massive" bombing of Cambodia in 1969, Henry Kissinger said, "Anything that flies on everything that moves".  As Barack...
John Lennon's "Imagine," Made Into A Comic Strip
John Lennon. Art by Pablo Stanley · 1,577 views today · This is easily the best comic strip ever made.  Pabl
Today I Rise: This Beautiful Short Film Is Like a Love Poem For Your Heart and Soul
4 min · 1,424 views today · "The world is missing what I am ready to give: My Wisdom, My Sweetness, My Love and My hunger for Peace." "Where are you? Where are you, little girl with broken wings but full...
Blind Man and His Armless Best Friend Have Planted Over 10,000 Trees in China
Kate Good · 1,336 views today · It doesn’t happen often, but every now and then you hear a story about people overcoming all odds to help others and it completely changes your perspective of the world. The...
The Empire's War on the Border (2016)
50 min · 1,282 views today · Join Abby Martin as she investigates why there are thousands of bodies on the US Mexico border--and uncovers a hidden war--in this full-length documentary, originally aired as...
Who Are You? This Breathtaking Video Might Change Your Life
2 min · 1,269 views today · "Normal is getting dressed in clothes that you buy for work, driving through traffic in a car that you are still paying for, in order to get to a job that you need so you can...
The Most Amazing Guide to Leadership Ever
3 min · 1,194 views today · Useful advice for starting a dance party or a mass movement to change the world.
THE WISDOM TO SURVIVE: Climate Change, Capitalism & Community (trailer)
3 min · 1,010 views today · Climate change is taking place. Will we have the wisdom to survive? The film features thought leaders and activists in the realms of science, economics and spirituality. The...
Republicans Welcomed Bernie Sanders to Wisconsin By Calling Him an Extremist. His Response? Perfect.
5 min · 969 views today · This was just awesome. No wonder so many people love Sander's message. The opening minutes of the July 1st rally was a classic #FeelTheBern moment, delivered to a 10,000...
Nigerians Are Building Fireproof, Bulletproof, and Eco-Friendly Homes With Plastic Bottles and Mud
Amanda Froelich · 894 views today · These colorful homes are bulletproof, fireproof, and can withstand earthquakes. They also maintain a comfortable temperature, produce zero carbon emissions, and are powered by...
F*ck That: A Guided Meditation for the Realities of Today's World
2 min · 887 views today · Just acknowledge that all that sh*t is f*cking b*llshit — you're here now, in this place, with your inner stillness. Take in a deep breath ... now breathe out. Just feel the...
The White Man in That Photo
Riccardo Gazzaniga · 840 views today · Sometimes photographs deceive. Take this one, for example. It represents John Carlos and Tommie Smith’s rebellious gesture the day they won medals for the 200 meters at the...
The Future Must Be Green, Red, Black and Female
Robert Jensen · 730 views today · The future of the human species - if there is to be a future - must be radically green, red, black and female. If we take this seriously - a human future, that is, if we...
I Wish for You... Jeremy Irons is a Grandfather With A Beautiful Message for His Granddaughter
5 min · 613 views today · 'War Horse' author Michael Morpurgo and actors Jeremy Irons and Maxine Peake have joined forces to make a powerful new 5 minute film especially for you. Please watch and...
Load More
Like us on Facebook?