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Tuesday, June 5, 2012
Microlending is something we will continue to focus on with the Hickory Hound. One year ago (May 2, 2011) I had a discussion with the Mayor about this issue on Hal Row's Radio Program. It is an issue that Harry Hipps ran on during his campaign for Hickory City Council in 2009. He was the first person I have heard in Hickory talk about fostering a capital mechanism such as this to help start-ups be able to take that first step towards Free Enterprise. We aren't talking about a handout. We are talking about loans. Microlending was first established in Third World Emerging nations, such as India, as a way to facilitate entrepreneurship amongst the poor. Harry first addressed this issue, because we have seen the lack of a credit function in this community and in many ways this relates to the grass roots business development we have seen in these emerging nations.
This issue was also carried forward by the initial Small Business Task Force and research was executed to establish its legitimacy as a viable economic/financial function in relation to small business start ups. When this issue was brought forward at the City Council retreat of December 2009, our City Manager Mick Berry stated that it was illegal and would not let the presenter even address the issue to the City Council. Not only that, but a question was asked about could one of the businesses start a Sign Company and the answer was that they might be able to, which I feel is a petty/ignorant/selfish question. It shows that the aim, first and foremost IS to protect a personal vested interest at the expense of community growth. Microlending functions have been established in large Metro areas such as Charlotte, NC and San Francisco, CA, as well as locally in Valdese and Burke County and other communities in the Advantage West Economic Development Group. This proves that the premise of Hickory's City Manager is 100% false.
The most egregious issue is that the Microfinancing wasn't even allowed to be discussed with the City Council in 2009-10 and more than 2 years later we have still seen that this issue has been squelched. This is the pattern that I have alluded to over time relating to Hickory's governance. The stifling of debate and critical thinking about how to move this community's economy forward. 99% of the time, City "Leadership" makes up their minds about processes before they are even discussed. This closed mindedness is not leadership. It is also a reason why people don't participate in government around here and frankly I think Rudy Wright and Mick Berry like it that way.
You have seen me espouse this issue many times before related to the duplicity on the issues that face the community. The Mayor in the presentation above talks about needing to know a little more. He had the opportunity in December 2009 to hear a lot more about MicroLending/Microcapital/Microfinancing, but he chose to participate in stifling the discussion, which seems to be his forte. This issue, by the way, was discussed a lot by the Task Force that Mayor Wright personally created a few years ago.
I have been told personally that a Microlending function would be very helpful to Innovators who have had contact with the Manufacturing Solutions Center. Dan St. Louis, the head of the center, said that sometimes these people might only need a few hundred or a few thousand dollars. These people are usually working full time jobs and have families. In this economy, their personal budgets are stretched and they don't have money laying around to help with their side venture, so it is put on hold. So our economy is put on hold by the shortsightedness of a leadership looking to protect some theoretical interest that may not even exist. Luckily for Dan, the Manufacturing Solutions Center will soon be relocating to Conover, which surely seems to be a much more economically progressive community than Hickory.
I was in a discussion related to the local economy last week and a question was asked about how we felt about the economic condition of the community compared to last year. There were 9 people present. One person said they saw signs of progress. One said that they were seeing signs of signs of progress -- People finding work. Five people, including myself, said the economy was the exact same and 2 said it was much worse. One who said it was worse, said it was because people had used their reserves and they no longer have that cushion to fall back on, but the near term future didn't look to be improving and that malaise together with the loss of the cushion is very scary. Another person said that it depended on who you are. If you are at or near retirement, then your perspective is going to be different than a younger person. We still have a huge problem with the slow velocity of business in our local community.
In my opinion, the Mayor has only been working for years to serve the interests of a handful of people. Many of these people are operating in Cruise Control and they can't relate to the people that are struggling. The people who do know that people are struggling are growing perturbed by the priorities of Hickory City Leadership and their lack of real action related to the local economy. The Mayor has always said that we need to bring our ideas to him and he is looking for the "Right" idea. Well, look, this microlending idea was brought to him and he has done absolutely nothing. Yet, we have a half a million bucks to put up a tent on Union Square.
The Banks in this community have pulled back on their lending and that is understandable. We have seen a local bank bought out because they lost their A-double-you know whats playing the Credit derivatives game on Wall Street. Back in the early 2000's would you have ever thought that this bank would have found itself in a bind?
We need alternative sources of capital to move this community forward and microlending is a good start. All anyone wants is the City to be supportive of this process. No one is looking for a handout. No local government official can give you a valid reason not to try this. I just don't think they like the people that are promoting it and I also do believe that they are worried about how some Bogey Man might have an effect on their personal business venture.
I get tired of saying this, but we have got to do something. We have got to try some things. Last year, the Mayor kept throwing around this $20 million idea/figure. We don't even need $20 million. Put $1 million into a Microlending trust. Draw up contracts to get the money back and eventually you can decide after ten years whether you want to leave that money in there for the public good or take it out and use it for something else for the public good. This money would be a dynamic investment that would feed off of itself. It is the public's money and this is the kind of investment we would all hope the government would make. An investment than can benefit the whole community and not just a few.