32 of 32 people found the following review helpful
Omnivore's Dilemma for the financial world,
This review is from: Locavesting: The Revolution in Local Investing and How to Profit From It (Hardcover)
If Michael Pollan changed the way you think about food, let Amy Cortese change the way you think about finance.
Modern finance helps you invest in offshore drilling rigs 10,000 miles away within a matter of seconds but makes it nearly impossible to keep your favorite dive bar or local bakery from being shut down because they can't get the simplest of loans. It greases the wheels to turn your dollars into another Starbucks, but will stand in your way in keeping the corner coffee shop open. It strangles small businesses in their infancy and channels the world's financial resources towards the biggest and most well-connected companies. This senseless perversion of finance is the same reason that the recession shuttered independent store fronts across the country, while their chain-store counterparts never closed and even expanded into the very same empty storefronts, never to close. This fundamental misalignment is addressed head-on by Locavesting, which confronts Big Finance directly, with art and an intelligence that comprehends the big picture of modern finance (and its distortions), and opens the door to the solution: local investment, an option that provides a host of solutions, all ripe for the picking.
By way of background, I worked as a financial professional drafting and polishing financial disclosures for Fortune 500 companies and dabbling in the superstructure of Big Finance and feel like I have a good grounding in the world of finance. To that end, Cortese has clearly done her homework and has synthesized her deep understanding of the financial system to skillfully highlight the pressure points in the system, the bottlenecks preventing a more productive financial system and has clearly put her faculties to work in diagnosing the illness and prescribing the treatment. Yes, there are piles of brilliant books that tell you what went wrong with our financial system and what we should have done - but Locavesting tells us the way forward.
Even her unadorned statistics make for powerful arguments:
- Every dollar spent at a locally-owned business generates three times more direct, local economic activity than a dollar spent at a corporate-owned peer.
- Small businesses make up 99% of all U.S. companies, employ half of all private sector employees and contribute half of private GDP, yet of the $26 trillion held in public securities, not a penny goes to local business.
- Of all of the money that flows through our stock markets, 1 percent goes to productive use and the other 99 percent is trading and speculation.
We recognize that buying products is a vote -- whether commodity corn or sweatshop sneakers. We should equally recognize that an investment dollar is also a vote -- whether it goes to big box retailers and feedlots or your community bookstore and butcher. It is astounding that local finance, such a simple concept, has been so lost in the financial casino that its re-introduction feels like a revolution. We want our food to be local, we buy local to support our communities, we wax nostalgic about the un-defining of our distinctive communities, yet we still funnel all of our money into the hands of a few financial institutions (who, incidentally, recently threw themselves into chaos, took a buzzsaw to our economy and promptly continued on their merry way). Locavesting is a powerful call to re-imagine the meaning of investment and to reconsider what it means to invest -- that a thriving community and the preservation of local identity and independence can itself be a return on investment.
If you know nothing about finance or are a steely-eyed vet of the financial services industry, I would suggest that you take the time to consider the revolutionary (and ironically historical) option of investing locally, where you live. We all have to make choices and Locavesting is an indispensable tool to begin thinking about how to make those choices.
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Initial post: Jun 13, 2011 8:15:06 AM PDT
Kristen M. Fleming says:
This reviewer's glowing praise and eloquent summary has ensured that I will read this book as soon as possible.
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