Ideas for Developing a Grass Roots Economy
Forget about trickle-down. Make our economy trickle UP!
(Editor’s note: in Illinois, the sixteenth congressional district has only one candidate on the November 05, 2024 ballot: the Republican incumbent, Darin LaHood. Scott Summers decided to run as a write-in. The following missive is directed to the voters of the sixteenth — and to Mr. LaHood — as well as to Scott’s readership. Find out more about Scott’s campaign at www.ScottSummers.org.)
What Representative LaHood Says:
“...Washington continues to approach economic problems with the same failing answer: throw taxpayer dollars at ineffective programs. ...(W)e need to cut overreaching regulations, eliminate burdensome mandates, and reform and simplify the tax code by closing loopholes and cutting rates. The government needs to step out of the way and let the American people drive innovation, open small businesses and expand existing businesses. That's the best way to grow the economy and create jobs….” Source: https://lahood.house.gov/economy
What Scott Summers says:
Mr. LaHood sounds a lot like Ronald Reagan, doesn’t he?
Forty years ago, Reagan was halfway through his presidency. And today, Mr. LaHood and Republicans continue to blather – just as Reagan did -- about regulations, mandates, loopholes, and cutting tax rates.
Forty years beyond Reagan, with very little to show for it -- apart, perhaps, from some nibbles at the margins. Still blathering. Still not getting much done for everyday people.
Let’s not forget: back then, there also was the so-called trickle-down effect. The wealthy were styled as job creators.
What a bunch of hooey that turned out to be.
Oh. Wait. The Republicans HAVE done one thing: they’ve cut tax rates.
The Tax Cuts and Jobs Act of 2017 (TCJA) cut corporate taxes, cut personal taxes for the very wealthy, scattered a few crumbs for everyday people, and ballooned the federal deficit.
Portions of the TCJA are up for renewal (or sunset) in 2025. Representative LaHood wants to renew many of them. (Mr. LaHood often postures himself as a deficit hawk. This isn’t so. His support of the budget-busting TCJA belies that.)
Going all the way back to Reagan and the Bushes (plus Trump), Republican tax policies have, time and time again, made complete jumbles of what federal budgets should contain – to the point of turning them into fiscal farces. Year after year, federal budgets and deficit spending have, together, steadily hollowed out our economy. Accordingly, they have put our long-term economic prospects at risk.
Now. I do agree with the representative that we should “...let the American people drive innovation, open small businesses and expand existing businesses.” But we should do it in ways that Mr. LaHood overlooks. Example one: he completely ignores climate change and its effect on the economy.
Our economy must be tailored to our ecology. I call it the eco-eco premise. It’s more than curbing pollution and CO2 emissions. It’s about creating wholly new styles of businesses. We long have had white collar jobs and blue collar jobs. Anyone for adding green collar jobs, and the economic opportunities that climate change inadvertently provides? Electric cars? Better construction and building standards? Retrofitting and insulating? Solar? Wind? You know the rest. In short: world economies cannot impose more than what world ecologies can bear.
A second must-do for our economy: create a trickle-up effect.
What? Trickle-UP? Yes. I said trickle-up.
In a trickle-up economy, local and home businesses will be encouraged and nurtured to power our economy. It’s almost the opposite of what Mr. LaHood decries as “...throw(ing) taxpayer dollars at ineffective programs.”
(Do you remember from biology class the term “transpiration”? It’s how plants draw water from their roots. A trickle-up economy would work the same way plants do.)
Economic transpiration (a/k/a trickle-up) will be transformative.
So, Scott, tell us. Just how would you establish a trickle-up economy?
We would move to a trickle-up economy through (1) education, (2) microloans and microgrants and (3) paid and volunteer coaches and mentors who are assigned to home and community-based startups. We would cultivate wholly new philosophies and mindsets.
Education would be through local libraries and community colleges. (Full disclosure: I’m a former community college trustee.) A number of them have programs on how to start a business. My own McHenry County College has a Small Business Development Center. They work with the U.S. Small Business Administration (SBA) and the Illinois Department of Commerce and Economic Opportunity (IDCCO). https://www.mchenry.edu/isbdc/
We should subsidize community college programs so that they can offer no or low-cost tuition to pre-qualified candidates for courses in administrative functions like incorporating a business and bookkeeping and taxes and personnel management and software. We should subsidize skill courses, too: auto mechanic, welder, and food service are examples. Combining administrative and skill courses would help someone open a restaurant, or a repair shop.
Through the SBA, IDCCO, local banks, and nonprofits, we should offer startup capital to new businesses in the forms of microloans and microgrants.
Establish more business incubators. These are places where groupings of small startups can set up shop. Costs are held down by pooling administrative and clerical functions. Coaches provide advice. Peoria’s NEXT Innovation Center is an example: https://www.peorianext.com/about/ Rockford’s EIGERlab is another:
https://www.eigerlab.org/
Set up General Stores in communities and neighborhoods, and provide microloans and microgrants to facilitate them. My General Stores idea is a bit like a cross between farmers markets and business incubators. Home based businesses would have a central place (a vacant storefront, perhaps?) to offer goods and services on a cooperative basis -- that is, participants would take turns staffing it for everyone else. Arts and crafts? House plants? Antiques? Jewelry? Woodcrafting? Clothing? Books? Soaps and cosmetics? You get the idea. General Stores, in combination with farmers markets, will boost local economies.
General Stores need not be exclusively local undertakings. Through the power of the internet, fledgling businesses founded through General Stores also can step up to marketing regionally, nationally, and even around the world. Stores also can (and should) network with one another, exchange ideas, and share best practices.
Importantly, bands of service providers could ride a circuit among several General Stores, offering occasional fixed days for repairs to bicycles, small appliances, clothing (i.e., mending on the spot), computers, phones, shoes, tool sharpening, and more.
Perhaps you’ve heard of enterprise zones, designed to lure big companies with tax and other incentives. General Stores could (and should) become mini-enterprise zones: state and local sales taxes could be waived.
Rather than rely solely on traditional corporate models of business organization and governance, let’s expand trickle-up opportunities in manufacturing through greater use of B-corporations (benefit corporations), employee stock ownership programs (ESOPs), co-operatives, and not-for-profit organizations.
As grass-roots small businesses grow, communities will grow with them. Expanding neighborhood businesses will create good jobs that can’t be shipped overseas. They will boost property values. Critically – intangibly – they will help instill pride and purpose.
See what I mean by trickle-up?
So, Mr. LaHood: change your mindset.
In the end, economic development is NOT a top-down process. Tax breaks and other perks for morbidly rich individuals and chew-em-up megacorporations are NOT where it’s at.
Instead, channel economic development directly through the good people of the sixteenth district. Your neighbors and mine. Your voters and mine.
Make our economy trickle UP.