Sentient Times Dec/Jan 06

Money in a Popsicle-Friendly World

Helping Our Community By Keeping Our Investments at Home

By John Darling

Catherine Austin Fitts is an alternative money guru with much experience in the mainstream money world.
This story draws from her writings, audio interview and a telephone interview from her home in Kalispell, Montana.

You worked hard for your money. You deposit it in your bank. Where does it go? Far away. What does it do? Things you don’t know about and they’re not good. That is, if you deposit (invest) in the big banks, the ones Catherine Austin Fitts calls the “Tapeworm Twenty.”

An alternative investment adviser and former US Assistant Secretary of Housing with Bush I, Fitts gives seminars, writes columns and forms “Solari Circles” to promote local investment, so your money stays in your community, where it can be used not just for basics like mortgages and small business loans, but for the sustainable visions, like alternative energy, housing and food systems.

The start, the big first step for you, the individual, is to “reverse the flow” of money out of the community. Find a good, well-managed local bank and ask them the hard questions, like: Where do you put my money? How much is invested back in this local community vs. how much is sent somewhere else? Who are your board of directors and advisory committee? Do you live in this region? Oh, and can I have a copy of your financial statement?

Doing this “job interview” (with the bank as the applicant) is not easy, after all, bankers are the powerful people who understand the economy—and most of us, the depositors, are not. But that’s all to the good, says Fitts, because a good, local, well-managed bank will put their financial statement in your hands in a matter of seconds, with a smile, and be glad to tell you what all the categories mean.

“There are a lot of good folks in local banking and if more money comes to them, they can do more good with it, locally, in things like helping clean up a local environmental problem, create alternative energy and cultivate a local food supply that doesn’t have to come from Monsanto. Honest bankers have had a difficult time over the last 20 years, so it’s energizing for them to get support from local people,” says Fitts. “It shows we’re pulling money from the tapeworm and giving it to people who like to run things honestly.”

People need to invest in smaller local banks, not because big is bad, but because if you follow the money, deposits made with the big banks go to the cabal of corrupt government (federal), Federal Reserve, FHA, financial markets that have skimmed off $4 trillion since 1998 and used it to build a world that doesn’t work for the middle and working class—or the earth, Fitts says. For more on the dark side of the picture, visit her website, www.solari.com.

How do you get it going in your community? First, identify the local wizards, like bankers, accountants and investors, the ones who get the picture and are “intelligent capitalists who are loyal to our community.”

Then, move all deposits—checking, debit, savings, retirement, CDs—to good local banks, the ones with great leadership that can be attested to by the local players and will communicate with you.

We spend a lot of money. Think of that not as spent, but invested. Organize locally, so, instead of spending (investing) in the chain stores for office supplies and sending the money to Chemical Bank of New York or somewhere, you’re keeping it right here—and you’re asking your local city and county governments, maybe even state, to do the same. Why should those folks, who are here to serve and support the community, be sending their bling (money in teen slang) to the dubious money barons, never to be seen again?

Underlying all this is the understanding that life is not all about financial capital. It’s also about “living capital,” which is the quality of life, the meaning, the happiness, the functioning of life as a positive, creative system that supports everyone, including all inhabitants of the natural world.

The indicator of community well-being is called the “Popsicle Index.” It comes from the question, “what percent of the community feel safe about sending a child to the corner grocery for a Popsicle?” Forty years ago it was 100 percent in most neighborhoods—and the Dow Jones was 500. Now the Dow is 10,800 and the Popsicle Index is zero, even in nice, rich neighborhoods. The Popsicle Index is not quantifiable, but is something we feel. We know in our hearts what it is.

What has the sense of community safety and well-being got to do with investments? Well, says Fitts, what we’ve created in the last two generations is a win-lose system in which the more you win at the financial markets, the more you lose in your community. A world devoted to building living capital is win-win and automatically builds financial capital, though it’s admittedly spread more widely among people, with fewer super-rich. It is something we invest in—and it returns actual dollar profit as well as making us want to get up each morning and keep doing it.

What does a sane, functioning, inclusive, planet-supportive, Popsicle-friendly system look like at the ground level? Well, says Fitts, suppose three women are having lattes. Alice says she’s worried because her $10,000 in CD’s at the local bank is only making her 3.5 percent. Betty says she’s worried because her $10,000 in stocks don’t get her much over 5 percent. Carla, a person of more modest means, says she’s worried because she has $10,000 in credit card debt at 20 percent or more. All of a sudden, light bulbs go on in all three women’s heads—what if, instead of sending their investments God knows where to do God knows what, Alice and Betty invested in getting friend Carla out of debt, paying off her card and having Carla repay them at say 15 percent? All the money stays here. Our neighbor’s life is increased in quality. So is ours. Most importantly, we’ve learned how to organize to think and act locally with our money—and ratcheted up the Popsicle Index five points. The community feels better, safer, more functioning. It works! We’re not helpless!

It teaches we can organize ourselves in groups, with the investment power to buy stock in a good, local bank—and get its board listening to how its money should be invested here in projects that up the PI (Popsicle Index), not the DJ (Dow Jones) Industrials. Such investments in local projects can’t be bought by outsiders, who, if the bottom line says so, will outsource the jobs to China and India, the meccas of cheap labor.

It’s a cross between the French Resis-tance and the French Revolution and, as Fitts says, “if you’re not in a conspiracy, start one!” With your friends. Because banks are allowed to leverage deposits and loan a lot more than they have, a seemingly small group of friends—applying pressure on a bank with the implicit threat of withdrawals—has a lot more influence than you think, she says.

You don’t need to do all this overnight. You’re busy. The world is not going to end if your retirement money keeps going to CitiBank for a few more months. Begin to diversify your assets, by creating an Alternative Portfolio, where the com-munity-positive stuff is. Create what Fitts calls a Solari Circle, creating venture funds for small businesses. These circles can network in raising capital and “as this happens, the big guys lose control of the economy—the tapeworm is flushed out of the body and human energy and wealth is maximized.”

This is not just about money. Money does not operate in a vacuum. It has to operate in a system that considers everyone and the well-being of the planet. Fitts calls this building arks (which hold all life), not investing in the Titanic (which is headed you know where).

“We can do this nice or we can do it rough but I assure you Mother Nature is going to make us do it,” says Fitts, who, on her website has a big box urging “Ready to Reinvent Your World? Start today: Turn off your TV; Eat fresh, local food; Switch banks to a well-managed local bank or credit union.”

I look at my interview notes. There it is, the last thing she says, very simple: Invest in those you love.

John Darling, M.S., is an Ashland writer and counselor and regular journalist with the Medford Mail Tribune.