Wednesday, September 25, 2013

Keynote speaker backs investing locally

Michael H. Shuman hopes to start a movement

Express Staff Writer

Michael H. Shuman

Communities can save their local economies simply by creating a local investment movement that shifts from Wall Street to Main Street, according to Michael H. Shuman, author of “Local Dollars, Local Sense.”
    Shuman is director of research at Cutting Edge Capital, director of research and economic development for the Business Alliances for Local Living Economies, and a fellow at the Post Carbon Institute. The economist, attorney, author and entrepreneur will be the keynote speaker for the Sustain Blaine Economic Summit.
    The full title of his latest book is “Local Dollars, Local Sense: How to Move Your Money From Wall Street to Main Street and Achieve Real Prosperity.” His previous book, “The Smart Mart Revolution: How Local Businesses are Beating the Global Competition,” received the bronze prize from the Independent Publishers Association for best business book of 2006.
    A prolific speaker, he regularly helps communities analyze economic leakages and job-creation opportunities and is invited regularly to speak to local governments and universities. He has lectured in 47 states and eight countries.
    His message remains the same, he recently told an audience in Boulder, Colo.
    “There is not a whit of local investment in the $30 trillion we have invested in the long term. This is a huge capital market failure,” he said.
    In “Local Dollars, Local Sense,” Shuman backs up the claims with how-to advice, showing investors how to put their money into building local businesses and resilient regional economies—and profit in the process.
    The book has been described as a revolutionary toolbox for social change. In its pages, Shuman demystifies the growing realm of local investment choices—from institutional lending to investment clubs and networks, local investment funds, community ownership, direct public offerings, local stock exchanges and more.

“Local businesses are at least as profitable
as Fortune 500 companies.”

Michael H. Shuman
Economist and attorney

    In an interview with “Bookselling This Week,” Shuman explained his theory.
    “Currently, Americans have $30 trillion in stocks, bonds, mutual funds, pension funds and insurance funds,” he said. “If our capital markets were functioning efficiently, roughly half of these savings would be going into the half of the economy that is local small business. In fact, almost none is.
“This is a stunning market failure, especially given that local businesses are at least as profitable as Fortune 500 companies and they are increasingly competitive (rising oil prices, for instance, will revive local manufacturing of nondurable products). A successful local investment movement could shift $15 trillion from Wall Street to Main Street, enough to revive communities across America.”
Shuman maintains that a healthy local marketplace is the first step to restoring the national economy, and that Americans are compromised by their own independence.
    “Even though nearly half of all Americans have at least one co-op membership, many entrepreneurs nevertheless have a go-it-alone philosophy that leaves them cool to the idea of having thousands of member owners democratically controlling their business,” he said.
    His law background has allowed him to explore the legal snafus that further impale the effort.
    Longstanding laws have essentially forbidden 99 percent of Americans “from putting their money into the local businesses we love by imposing impossibly difficult and expensive legal hurdles,” Shuman said. “The JOBS Act that President Obama just signed creates an exemption for crowd-funding that now allows us to begin putting at least small investments into local business with very little red tape and legal hassle.”

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