Let's Cut Out the Banks and Finance American Innovation

By Sander Hicks, AlterNet. Posted December 12, 2008.

Just this morning, I heard that my favorite union printing press had closed its doors. Last night, I heard that Olsson's, the great book/music place in Washington, D.C., closed all five of its stores last month. There are times when I work at my Vox Pop café in Manhattan and wait one hour for a single customer to walk in. Consumer spending is going steadily down. Unemployment is around 6.5 percent, and that's just the "official" rate.

I don't want to lose my company. I've worked so hard to build it over five years. I've been an entrepreneur since I started my first company at age 25. Along the way, I've seen how companies can grow, change the world, have an effect. I have seen how value is created.

Most of us have heard how great microfinance programs have been for poor, enterprising people -- many of them previously disempowered women -- in villages across the developing world. Why not try something like that here?

What if we had a big, grassroots, community-focused "green venture capital fund" in every town in America? What if there was new money available to all the creative souls out there yearning to quit their lousy job, or get out of the army of the unemployed and start a company that did something in the public interest?

We could do this. We could create a U.S. Social Ventures Administration --  a fund that that backed companies that offered a nice financial return on investment, but also a serious social return to the public.

Let's face it: As a presidential candidate, Barack Obama's $700 billion bailout was a mistake. Sure, it was a mistake made under pressure. But alongside John McCain and President Bush, he voted for a financial fiasco that no one believes in now, even Bush's own Treasury secretary.

Well, I'm well outside the circle of the "center-right" economists on whom Obama is leaning for advice. Robert Reich recently claimed, "we don't need visionaries," but I beg to differ. What if you took a hybrid of progressive social values, environmentalism, American hustle and the magic of the marketplace? (Yep, this is a hybrid sure to piss off everybody! Or it just might work…)

Instead of thinking about government handouts, let's reframe the argument: What if the U.S. federal government started thinking of itself as an investor, instead of as a reluctant donor? Instead of a handout, the USG should expect a return (either social or financial) on whatever money it puts into a venture. So, a new program should be started, the U.S. Social Ventures Administration (USSVA).

President-elect Obama recently said: "We'll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children, and building wind farms and solar panels; fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead."

That's great, but what's the plan for execution? And how can he get everyone on board? What if the execution of this vision was designed in a way that fired up both the working class and Wall Street? Well, I've worked at Kinko's, and I've worked on Wall Street; there is a way to do this.

The USSVA would advance a whole new way to think about finance. It would take the best of free-market economics and principled government planning. USSVA would fund new ventures in the public interest, like the infrastructure and green energy projects Obama promised. But USSVA could eventually be expanded to include new-media companies, to enrich our democracy through new technology and a freer exchange of ideas and information. We could use USSVA to reindustrialize the USA, and retool our plants and factories. We could use USSVA to rejuvenate American agriculture, to move away from pesticide-laden crops and get away from genetically modified factory farming. All of which would boost employment and put the whole U.S. economy on steroids, so to speak.

See more stories tagged with: financial crisis, microfinance

Sander Hicks runs the Vox Pop/DKMC media machine and coffeehouse. He is publisher at the New York Megaphone newspaper, and author of The Big Wedding: 9/11, The Whistle-Blowers and the Cover-Up. He lives in Brooklyn.

Liked this story? Get top stories in your inbox each week from Corporate Accountability and WorkPlace! Sign up now »