Legalize Local Investing
By Michael Shuman /

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.


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

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
Load Comments
Trending Today
M.I.A. Just Dropped a Killer New Track in Solidarity with Migrants
5 min · 15,602 views today · Borders is dedicate to her uncle Bala, in a tweet posted this morning M.I.A wrote "One of the first Tamil migrants to come to the UK in the '60s who went [on] to inspire so...
John Pilger on Paris, ISIS and Media Propaganda
18 min · 9,592 views today · Afshin goes underground with one of NATO imperialism's greatest chroniclers, John Pilger. The award-winning journalist and filmmaker tells us how Washington, London and Paris...
Today I Rise: This Beautiful Short Film Is Like a Love Poem For Your Heart and Soul
4 min · 6,750 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...
Confessions of a Walmart Hitman
11 min · 5,665 views today · Former Walmart executive recounts how he would watch Associates sit in the break room during their lunch hour without eating because they couldn't afford food. Walmart banned...
John Lennon's "Imagine," Made Into A Comic Strip
John Lennon. Art by Pablo Stanley · 3,468 views today · This is easily the best comic strip ever made.  Pabl
The White Man in That Photo
Riccardo Gazzaniga · 3,114 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...
Australian Comedian Perfectly Sums Up Why Other Countries Think US Gun Laws Are Crazy
14 min · 2,335 views today · At least 10 people were killed and 20 others injured when a shooter opened fire on the campus of Umpqua Community College in Oregon Thursday, October 1. According to Douglas...
The Century of the Self (2002)
230 min · 1,670 views today · The Century of the Self tells the untold and sometimes controversial story of the growth of the mass-consumer society. How was the all-consuming self created, by whom, and in...
Caitlin Moran's Posthumous Advice for Her Daughter
Caitlin Moran · 1,311 views today · My daughter is about to turn 13 and I’ve been smoking a lot recently, and so – in the wee small hours, when my lungs feel like there’s a small mouse inside them, scratching to...
The Image Hollywood Created of Africa
3 min · 1,303 views today · After viewing Mama Hope's video, "Alex Presents Commando," Gabriel, Benard, Brian and Derrik (the Kenyan men in this video) told us they wanted to make one that pokes fun at...
This Amazing Spoken-Word Film Captures the Madness of Shopping in 4 Minutes
4 min · 1,278 views today · ‘Live Rich’ - A spoken word film about the true meaning of wealth. Follow Buy Nothing Day on Twitter and Facebook. Video by Gary Turk.
John Pilger: "There Is No War On Terror... There Is A War OF Terror."
3 min · 1,235 views today · John Pilger speaks frankly about the "War on Terror," saying that no such thing exists. "There is a war OF terror," he says, and it is primarily state-sponsored terror, and...
We Created Islamic Extremism: Those Blaming Islam for ISIS Would Have Supported Osama Bin Laden in the '80s
Ben Norton · 1,231 views today · Jingoists conveniently forget the West's Cold War strategy was to arm the Islamic extremists that became al-Qaida
How Wolves Change Rivers
4 min · 1,127 views today · When wolves were reintroduced to Yellowstone National Park in the United States after being absent nearly 70 years, the most remarkable "trophic cascade" occurred. What is a...
HUMAN (2015)
382 min · 1,076 views today · What is it that makes us human? Is it that we love, that we fight? That we laugh? Cry? Our curiosity? The quest for discovery?  Driven by these questions, filmmaker and artist...
A Brief History of European Colonization in Africa
4 min · 1,058 views today · This clip, narrated by Kevin Spacey, comes from the feature documentary Uganda Rising. It shows how Africa was carved up by European colonial forces, using divide and rule...
Where Is Our Jeremy Corbyn?
Chris Hedges · 960 views today · The politics of Jeremy Corbyn, elected by a landslide Saturday to lead Britain’s Labour Party after its defeat at the polls last May, are part of the global revolt against...
What Would Jesus Buy? (2007)
91 min · 927 views today · Religion aside for a moment, there’s a terrible addiction that has swept across this country, and it’s one of the nation’s best kept secrets. Mostly everyone will tell you that...
Wake Up Call: End the Nightmare of Consumption
6 min · 873 views today · Hidden beneath sleek, space-age screens and shining metal, the true cost of our gadgets lurks unseen… Have you ever felt like we're living through a nightmare of consumption?...
Affluenza (1997)
56 min · 767 views today · AFFLUENZA is a groundbreaking film that diagnoses a serious social disease - caused by consumerism, commercialism and rampant materialism - that is having a devastating impact...
Load More
Like us on Facebook?