3c hapter - Index of

60 Locavesting
Some of the measures his department is considering are taxing
Internet sales, which could snare $70 million (Illinois is one of many
states that don’t collect tax on online sales, which hurts local retailers),
creating a microloan program for entrepreneurs, and helping
local independent businesses create Buy Local programs and
strong local branding to boost sales.
Other states, such as Vermont and Arizona, have been successful
in promoting local business as a way to create jobs. “We’re
a follower,” concedes Lutes, “but we’re kind of a big follower.
Larger states are still in the thrall of trying to get the big score.”
An independent look at the numbers backs up Lutes’ logic.
From 2006 to 2008, Illinois resident companies (independents and
fi rms headquartered in the state) added a modest 35,000 jobs. Nonresident
companies, on the other hand, shed 151,000 Illinois jobs,
or 10.8 percent of their state workforce, according to YourEconomy.
org, a brilliant interactive database developed by the Edward Lowe
Foundation. Try it and see who is creating jobs in your own state.
Now it is our turn, as investors. A Los Angeles Time article about
the Bill and Melinda Gates Foundation called attention to the contradictions
that investing often entails. 35 The foundation spends
hundreds of millions of dollars on programs aimed at improving
health and eradicating deadly diseases in Africa. Yet its assets were
invested in oil companies whose African plants spew toxic fumes
that have contributed to widespread health problems in the region.
Similarly, many citizens are frustrated with the high rate of unemployment
and other economic ills, but have all of their savings
invested in some of the companies most responsible for sending
jobs overseas and reducing worker standards.
Socially responsible investing (SRI) is a good start. But the
SRI model—of screening out companies whose business invol ves
weapons, tobacco, or troubled regions of the world, rather than
proactively seeking out the kinds of companies we want to encourage—
has its limits. Local investing is proactive impact investing. Think
of it as a grassroots stimulus.
Locavesting is not a panacea. Many of the investment models
you are about to read about are little more than grand ideas, with
the hard work of hammering out the details still ahead. Some will