Local solutions for local needs

Local trade is gaining currency across the country as a rational response to the spreading economic collapse. Even macro-economists like Paul Krugman, generally focused on national and international finance and production, have noted that local economies matter.

The easiest local supply lines to envision involve food because we already have the ingredients (land and water) and the expertise (small farmers) to ramp up production.

But another way to advance our local economy is to adopt a plan I advanced a year ago during the county commission race. We should distribute questionaires to local businesses asking them to identify the ten or twenty items they most frequently procure from outside our region. Collating those responses we can first help local businesses make local supply connections to keep local dollars local as long as possible. (See below concerning the benefit from this practice.)

Next, we could sift through the responses to identify manufactured products that could be reasonably produced right here in WNC. We have empty manufacturing facilities just waiting for adaptive re-use. We can capitalize on our built environment and put citizens back to work while strengthening our local economy.
Concerning the multiplier effect of local dollars:

When we pay our money to local merchants and service providers the money recycles as they pay their employees and the employees in turn feed other local businesses. If they are smart they bank with local banks which make local loans (Asheville Savings is one good local example which hasn’t been battered by the international collapse due to its local financial model.)

When we spend our money out of state or patronize mega retailers a large part of the money flows out of the local economy. While it’s true that the big retailers hire local workers, the history of stores like Wal-Mart has been that they create net unemployment in every market they enter. The putative lower cost of products (which supposedly benefits consumers) is more than offset by the reduction in the local multiplier. (And to make matters worse, such large retailers have often sold themselves to local governments as job sources and been granted tax benefits which penalize local businesses at the expense of the outside corporation. Again, using Wal-Mart as an example—the company has a track record of utilizing part-time, uninsured employees whose wages are so low that they depend on government health programs. This further penalizes local taxpayers.)


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