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Economic Stimulus: Yes We Can, Locally

Are ordinary consumers responsible for the financial crisis that has brought the national economy to its knees? In many ways, no. Most of us had no say in the deregulation that paved the way for subprime mortgages and other high-risk behavior of financial institutions that are now gasping for air and pleading for federal bailout money. Most of us have no control over the business and investment practices of the large corporations whose lack of fiscal discipline threatens to saddle the U.S. economy with widespread unemployment and a ripple effect of economic woe on Main Street. And most of us can only sit back and wonder at the logic that deems such institutions “too big to fail.”

And yet, in another sense we are all responsible, because of the many ways in which we have invested, however unwittingly, in the global economy’s house of cards. By now it’s no secret that many ordinary Americans, encouraged by the easy credit of the past decade, have borrowed more than they can afford to pay back. Less obvious, but no less real, are the ways in which our day-to-day living and spending habits—making long commutes to and from work, shopping at big-box chain stores, eating processed foods shipped in from thousands of miles away—have put us at the mercy of national and global economic instability by eroding the once-tightly-knit fabric of our local economies.

Our buying and borrowing habits do matter; the good news is, by understanding and acknowledging the power we have as consumers, we can turn that power into an engine to revive our local economies, in the Capital Region and all across the nation.

Common sense should reinforce what research already shows: When we spend money on goods and services from locally owned, independent businesses, the positive impact on the local economy is significantly greater than when we spend the same dollars at big-box stores and other nonlocal chains. When we buy from corporate chains, we do help pay the salaries of that chain’s local employees, and, to the extent that they contract with local suppliers, we help support their livelihoods too. But a large percentage of that money leaves the region immediately—and often goes toward things that undermine the economy on both the national and local levels, including overseas imports, anticompetitive capital investment, inflated corporate salaries, and lobbying for tax breaks that are never offered to small, locally owned businesses.

According to commonly cited research, 73 percent of consumer money spent on locally owned businesses recirculates within the local economy, compared with a mere 43 percent of money spent on national chains. Given those numbers, a relatively small shift in consumer spending habits could have a staggering effect on local economies everywhere.

With the holiday shopping season upon us, Metroland offers this challenge to its readers: Make a concerted effort to spend $100 of your holiday budget on locally owned businesses. We believe it is reasonable to assume that many of our readers spend at least this much, if not quite a bit more, on holiday gifts—and that the local business community offers plenty of opportunity to spend $100 right here. In case you’re not sure how much impact that could have, consider this: If everybody who reads Metroland at least once every four weeks accepts this challenge, the net positive impact on the local economy could be as much as $5 million. (For more information on how you can participate in the challenge, please see the promotional ad on page 7.)

In offering the $100 buy-local challenge, Metroland has joined an initiative spearheaded by Jody Colley, publisher of the East Bay Express in Berkeley, Calif., which now includes more than 80 participating alternative newsweeklies across North America. Our intent is not to be strictly anti-chain: We recognize that not all of your consumer needs can be met by local businesses. We are asking that readers make the effort to consider their options and buy local where and when it makes sense to them (and also to recognize that the sometimes-cheaper prices at large chain stores do come with a cost to the local economy).

Imagine a community where independent businesses, stores, farms, arts institutions, etc., supported each other and provided for a large percentage of consumers’ goods, food and entertainment; where necessary credit was provided by local, nonpredatory financial institutions that were invested in the long-term health of the local economy; where little effect was felt from the risky speculation and unsound investments of large, faraway corporations. Does that sound too utopian—or does it sound like something worth working toward? Think of the buy-local pledge as a small first step. Our local business community has a lot to offer—and all of us, collectively, have a lot to offer our local economy by thinking twice about where we spend our money this holiday season and beyond.

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