Sound bytes try to communicate events that often require closer inspection. Depth is just one attraction of award-winning journalist Amy Cortese’s book, “Locavesting – The Revolution in Local Investing and How to Profit From It (John Wiley & Sons, 2011).” Released in June, after almost two years of work, this book provides a detailed context with which to filter the sound and vision of “Occupy Wall Street” and the autumn of our discontent.
Part history book, part long-form feature, part instruction manual – Locavesting is Cortese’s case for grass roots economic change. The amount of research – 204 footnotes and seven pages of index terms – reflects her journalistic sensibilities. But, Cortese’s combined experience with content management for a financial company, as well as her assignments in a diverse media career, help frame her reference for the book’s concepts.
As a provider of small business assistance, and now as an owner myself, this book grabbed me with its timeliness and message. From a marketing perspective, small business is regularly used as a platform by those that want to be cast in an entrepreneurial spotlight. Yet, the talk doesn’t always lead to support for the efforts of small business owners.
Cortese has been on the go even before recent events. We were able to connect for an electronic interview on her book about a subject that is worthy of more attention.
CD: So, Amy, could you have ever predicted the timing of your book’s release and the recent “Occupy” events?
AC: No! It’s funny, when I was working on the book in the aftermath of the financial crisis and Wall Street bailout, my publishers wanted to rush the book out to make the most of the moment-the outrage and frustration people were feeling with a system they perceive as rigged for the wealthiest corporations and individuals. But, as we can see from the Occupy Wall Street movement, that sentiment is not going away. In fact, it is only growing stronger.
CD: You credit your coverage of a story about the “Slow Money” movement in New Mexico for the push to expand on “Locavesting.” What was it that sparked your creative energy to write this book?
AC: I attended the first national gathering of Slow Money in the fall of 2009. It was almost a year to the day of the collapse of Lehman Brothers and, while things were looking up on Wall Street, it was a very different story in many towns and neighborhoods still reeling from the sub-prime crisis and recession. What I saw at that conference was that not only were people looking for alternatives, they were out there creating them.
There were many ideas swirling around about how to channel money to locally owned enterprises, and that was a real eye opener for me. The more I looked around, the more I saw happening – community lending, local investment clubs, cooperatives, crowdfunding, direct public offerings, local stock exchanges. The book is my attempt to put my arms around and make sense of what I saw as this vast experiment in citizen finance.
CD: A history lesson of economic policy in the United States and hard core number crunching makes up the first half of your book. Was that important in your mind to make sure readers didn’t dismiss your examples of “Locavesting?”
AC: Well, I think the economic intro was necessary to set the stage and draw a distinction between the Wall Street and Main Street economies. Some of the facts are staggering. At the same time, there is a very persuasive case to be made for allocating more capital to the small businesses that create two out of every three jobs and, dollar for dollar, contribute more to their local economies.
But, as you suggest, the media and serious people have been known to cover these sorts of stories like a cuddly puppy…”oh, isn’t that cute. Look what that nice community did!” So, I think you need both hard facts and a compelling narrative. Although I use a lot of storytelling, the book is essentially a prescription for how to rebuild our hollowed out economy and create a more inclusive form of capitalism. I hope people will read the first few chapters and get angry enough to want to make some change. Then, I give them lots of ideas for how to do that.
CD: The “Locavore” movement has gained traction through buying and eating local. But, you point out that our current financial system exists to support itself. Will economic policies and actions within the country allow “Locavesting” to build the same momentum?
AC: I think the Occupy movement has done a lot to bring some of these issues to the forefront where they can no longer be ignored. There is actually bipartisan support to change some of the regulations that hamper small business capital fund raising. President Obama’s jobs package was defeated – no surprise given the partisan gridlock these days – but some elements, in particular a crowdfunding exemption that would make it easier for small private businesses to reach out to their supporters and customers for funding, are also being promoted by Republicans.
In fact, the House recently passed a crowdfunding bill, with near unanimous support, which was similar to the president’s proposal. Now, it goes to the Senate. The worry is that relaxing the rules could open the door to fraud, but there are ways to address that. In my view, the best way to mitigate that risk is to keep it local, where social connections and reputations lessen the likelihood of fraud. These rules changes could open up a huge pool of potential capital for entrepreneurs. But, to really affect change, we need to sever the ties between money and politics, where deep pocketed corporations and individuals buy influence. That’s a much harder challenge.
CD: You discuss the way small business is used in politics and marketing to score style points, but rarely are small businesses given the support needed to become an economic force. Faced with the current landscape, will more weight be given to “Locavesting?”
AC: Yes, politicians love to talk about small business – it’s as American as apple pie. But, the truth is, our policies regarding everything from taxes to economic development, are skewed towards the largest corporations. I do think there is a growing realization that we are choking off the entrepreneurs and small businesses that create jobs, spur innovation and allow for social mobility. President Obama has launched the Startup America initiative to tackle this issue.
I think the Occupy Wall Street movement has drawn attention to the increasing inequality and inequity in our system that will be hard to sweep back under the carpet. There are also new business groups, like the American Sustainable Business Council and American Independent Business Alliance, that have formed to counter the voice of the powerful and multinational-dominated Chamber of Commerce. The strangest thing is that now you even have big corporations glomming onto the local/small business trend!
CD: In my opinion, you told some great stories in your book. Which was your favorite?
AC: Oh, so many to choose from! One of my favorites, and a lot of people’s favorite, is the nine cops in Clare, Michigan who saved their 100-year old bakery from going out of business and revitalized their downtown in the process. One of the cops was out on patrol one morning when he heard the bakery was going to close for good. Not only was it a fixture of his youth, but if it closed, it would be one more vacant storefront on Clare’s main drag. So he convinced his fellow officers-the entire police department actually-to buy the bakery.
These cops are very clever and have a great sense of humor. They tweaked the menu, adding “The Squealer”-a bacon topped maple doughnut, created t-shirts with slogans like, “Don’t Glaze Me ‘Bro,” and renamed the shop Cops & Doughnuts. They got a ton of press and the bakery became an overnight success. Now, it employs more full-time people than the police and fire departments combined. That success spilled over to other downtown merchants, and instead of vacant storefronts, new tenants have moved in. Like many small businesses, the cops also buy as much as they can from area suppliers, sponsor local sports teams and support local charities. It’s a fun story, but one that shows the power of local investing.
CD: You took the great effort to show that this concept is not a “quick fix.” What overall message do you expect readers to take away from this book?
AC: I hope people will come away knowing that there are alternatives to the current system and that we have it in our power to create change, from the ground up.
Glenn Kass created Catch Driver Marketing because he believes small is the new big. To get your ideas on track, click www.catchdriver.com. You can also check out Catch Driver on Facebook (www.facebook.com/catchdrivermarketing) and Twitter (@CatchDriverMktg).