Financial Ecosystems, Part I
Chicago’s 49th Ward
At the Financial Permaculture Summit in Hohenwald, Tennessee this September, we will be spending significant time on how to map your financial ecosystems. This means identifying the financial systems, incentives and resources in your place and their interaction and alignment with people, living systems and natural resources.
One of the things that we have discussed is whether or not to add a workshop on participatory budgeting. In the process, I learned that the participatory budgeting networks are abuzz with excitement about the participatory budgeting effort being introduced in the 49th Ward of Chicago.
The Watson Institute for International Studies at Brown University is in the lead on the Chicago effort as part of its Participatory Democracy Project under the direction of Watson Institute Associate Professor Gianpaolo Baiocchi. The Project’s research, supported in part by the Ford Foundation, will result in a book that takes stock of the “civil society agenda” today. Their efforts in the 49th Ward of Chicago reflect the invitation of Chicago Alderman Joe Moore.
This is indeed exciting. Participatory budgeting has the potential to strike a much healthier relationship between citizenry and the creation and application of government credit, regulation and taxes. Developed originally in Brazil, it has not yet been tried in the United States.
The opportunities to re-engineer government resources in communities are much greater than many of us realize. When I became Assistant Secretary of Housing in the first Bush Administration, I was first inspired to look at the federal budget by neighborhood when the head of the Chicago Housing Authority requested permission to take public housing funds in projects spending $250,000 per unit to buy government foreclosed single family homes and rehab them for $50,000 per unit in the same Chicago neighborhood. On Wall Street, getting five for the price of one is what we call an “arbitrage.”
The request was denied. It was illegal to move housing funds from one federal housing program to another, regardless of whether it would create many more homes in the same neighborhood. When I suggested the same opportunity to one official in the Clinton Administration, she said, “but how would we generate fees for our friends?”
Alas, we have a significant challenge with many Americans and companies now dependent on billions in government programs developed through political considerations without professional investment standards and accountability for performance by county or place. To appreciate the history, see my article, The Myth of the Rule of Law.
America is filled with such “community arbitrages.” They offer the potential to get much more for less if we approach change with a new concern for both people, natural resources and both public and private financial resources. To find and re-engineer these opportunities is a complex task; ideally done with citizen participation.
Mapping The Real Deal is a column on Scoop supervised by Catherine Austin Fitts. Ms Fitts is the President of Solari, Inc. http://www.solari.com/. Ms. Fitts is the former Assistant Secretary of Housing-Federal Housing Commissioner during the first Bush Administration, a former managing director and member of the board of directors of Dillon Read “ Co. Inc. and President of The Hamilton Securities Group, Inc.