10 Common Sense Principles for a New Economy

10 Common Sense Principles for a New Economy
It’s time we the people declare our independence from the money-favoring Wall Street economy.
by David Korten
posted Aug 06, 2010
http://www.yesmagazine.org/blogs/david-korten/10-common-sense-principles-for-a-new-economy


I find hope in the fact that millions of people the world over are seeing through the moral and practical fallacies underlying the Wall Street economy and—by contributing to the creation of a New Economy—are taking charge of their economic lives.

Here are ten common sense principles to frame the New Economy that we the people must now bring forth:

The proper purpose of an economy is to secure just, sustainable, and joyful livelihoods for all. This may come as something of a shock to Wall Street financiers who profit from financial bubbles, securities fraud, low wages, unemployment, foreign sweatshops, tax evasion, public subsidies, and monopoly pricing.

GDP is a measure of the economic cost of producing a given level of human well-being and happiness. In the economy, as in any well-run business, the goal should be to minimize cost, not maximize it.

A rational reallocation of real resources can reduce the human burden on the Earth’s biosphere and simultaneously improve the health and happiness of all. The Wall Street economy wastes enormous resources on things that actually reduce the quality of our lives—war, automobile dependence, suburban sprawl, energy-inefficient buildings, financial speculation, advertising, incarceration for minor, victimless crimes. The most important step toward bringing ourselves into balance with the biosphere is to eliminate the things that are bad for our health and happiness.

Markets allocate efficiently only within a framework of appropriate rules to maintain competition, cost internalization, balanced trade, domestic investment, and equality. These are essential conditions for efficient market function. Without rules, a market economy quickly morphs into a system of corporate monopolies engaged in suppressing wages, exporting jobs, collecting public subsidies, poisoning air, land, and water, expropriating resources, corrupting democracy, and a host of other activities that represent an egregiously inefficient and unjust distribution of resources.

A proper money system roots the power to create and allocate money in people and communities in order to facilitate the creation of livelihoods and ecologically balanced community wealth. Money properly serves life, not the reverse. Wall Street uses money to consolidate its power to expropriate the real wealth of the rest of the society. Main Street uses money to connect underutilized resources with unmet needs. Public policy properly favors Main Street.

Money, which is easily created with a simple accounting entry, should never be the deciding constraint in making public resource allocation decisions. This is particularly obvious in the case of economic recessions or depressions, which occur when money fails to flow to where it is needed to put people to work producing essential goods and services. If money is the only lack, then make the accounting entry and get on with it.

Speculation, the inflation of financial bubbles, risk externalization, the extraction of usury, and the use of creative accounting to create money from nothing, unrelated to the creation of anything of real value, serve no valid social purpose. The Wall Street corporations that engage in these activities are not in the business of contributing to the creation of real community wealth. They are in the business of expropriating it, a polite term for theft. They should be regulated or taxed out of existence.

Greed is not a virtue; sharing is not a sin. If your primary business purpose is not to serve the community, you have no business being in business.

The only legitimate reason for government to issue a corporate charter extending special privileges favoring a particular enterprise is to serve a clearly defined public purpose. That purpose should be clearly stated in the corporate charter and be subject to periodic review.

Public policy properly favors local investors and businesses dedicated to creating community wealth over investors and businesses that come only to extract it. The former are most likely to be investors and businesses with strong roots in the communities in which they do business. We properly favor them.

http://www.yesmagazine.org/blogs/david-korten/10-common-sense-principles-for-a-new-economy


David Korten is co-founder and board chair of YES! Magazine, co-chair of the New Economy Working Group, president of the People-Centered Development Forum, and a founding board member of the Business Alliance for Local Living Economies (BALLE). His books include Agenda for a New Economy: From Phantom Wealth to Real Wealth, The Great Turning: From Empire to Earth Community, and the international best seller When Corporations Rule the World.

A New Gang Comes to Los Angeles: Solar-Panel Installers

In Tough Economy, Homeboy Industries Trains Ex-Cons for Brighter Prospects
By MIRIAM JORDAN

LOS ANGELES -- When Albert Ortega was released from prison four months ago, he was determined to turn his life around. So he went green.

Mr. Ortega sports tattoos of an Aztec warrior on his back, a dragon on his chest and the name of his former gang, the East Side Wilmas, rings his biceps. Drug trafficking kept him locked up for most of the past seven years, he says. But after serving his last term, for 18 months, he heard about a solar-panel installation course.

"I wanted a new way of life," says the tall, brawny 34-year-old. "Solar puts me on the cutting edge."

In the race to train America's "green-collar" work force, a group composed mostly of former Los Angeles gang members on parole is an early participant. Their training is funded by Homeboy Industries, a Los Angeles nonprofit that helps people with criminal pasts find employment.

President Barack Obama has made the production of renewable energy one of the pillars of job creation. All sorts of people are now rushing to acquire skills to launch careers in the budding sector.

For years, Homeboy Industries put former felons to work at a bakery and cafe it runs in East Los Angeles. Last summer, founder Greg Boyle, a Jesuit priest, was approached by a supporter about the idea of preparing them for the green economy.

Because job-placement for ex-convicts is especially difficult in a recession, "I leapt at the opportunity," says Father Boyle, who started Homeboy two decades ago.


Homeboy joined forces with the East Los Angeles Skills Center, a public vocational school that offers a hands-on program to teach the design, construction and installation of solar panels. The course is one of only a few such programs in California and commands a months-long waiting list.

The center created an intensive course for Homeboy. "I loved the idea of doing something for these guys," says Brian Hurd, the senior instructor who designed it. "My best student ever was a Homeboy referral" in a construction course, "who needed a second chance."

Homeboy, funded by individuals, community groups and revenue from its businesses, pays the $131 tuition for each student; it also pays participants an hourly wage of $8. The class meets for two months, weekdays from 9 a.m. to 3 p.m.

"I was so motivated, I would fall asleep with the books on my bed," says Mr. Ortega. Determined to get into the course, he phoned or visited Father Boyle for two weeks, until he was asked to take a drug test. Mr. Ortega passed and was offered a spot in the class.

"I knew I was good at wiring," says Mr. Ortega, who once installed car-stereo systems. "I was always good at math."

On a recent morning, some 30 tattoo-coated students sat at desks in a basement classroom, taking notes as their instructor scrawled algebra equations and geometry problems on a chalkboard. Then they figured out such things as the area of a house's roof and the angle at which solar panels should be mounted on it.

Manuel Delgado, 42, who dropped out of high school, said he struggled at first. But, four weeks into the class, he's doing "real good," he says. "I got 76% on my last math test."

Another student, Jessica Espinoza, 23, says she couldn't find a job after being locked up for two years because she helped a felon escape from a courthouse. "The minute they saw I went to jail, employers didn't give me the time of day," she says. "Hopefully I can take what this school gave me and make a career in this new industry."

In the afternoon, the students donned protective goggles and got to work on solar panels and electrical circuits in the workshop. At one station, they drilled holes through aluminum rails where panels are mounted; others drove bolts into metal racks. A few studied the layout of a roof to figure out sizing for pipes.

Homeboy Industries, a Los Angeles nonprofit, helps prepare students to enter the 'green-collar' work force

Mr. Ortega helped his classmates wire up a panel. One was Ken Chung, a general contractor who decided to train for a career in solar energy after his business of building homes and pools began to dry up.

After months searching for a training program, Mr. Chung decided the Homeboy course would give him the skills he needed. But when he informed his wife that most of his classmates would be ex-felons, she was worried. "I told her, 'Honey, just give me a week to try and see,' " he recalls.

On his first day, he says a fellow student asked: "What were you in for?" Mr. Chung, a 45-year-old Malaysian immigrant, didn't understand. "I asked him to repeat the question."

The East L.A. Skills Center offers a night class in photovoltaic installation (the official name of solar-panel installation) that is open to the general public, but there's a long waiting list. That's why some "regular folks" have been clamoring to get into the Homeboy class, says Ed Ruiz, the instructor. "Most of them take one look and say 'no thanks,' " he says.

Doug Lincoln, 61, who once managed luxury-car dealerships, was offered admission to the Homeboy course after he inquired about a faster-paced class. On hearing it was mainly for ex-cons, "I thought it was a joke," he says.

Now, Mr. Lincoln is about to graduate. He plans to start a solar-panel-installation firm, he says, and hire some of his former Homeboy classmates. "These guys are more motivated than hundreds of employees I've managed," in the car business, he says.

Mr. Chung, the contractor, has also thrived in the class. He and Mr. Ortega get together for lunch on the weekends, either tacos or Chinese noodles. "Albert has taught me many things," says Mr. Chung. They challenge each other to design solar-energy systems for homes and then critique each other's work. "I know about his kids. He knows about mine," says Mr. Ortega.

Last month, Mr. Ortega passed an exam that qualifies him to install solar panels nationwide. He says he has already been approached by employers. But he says he is waiting until Feb. 16, when he's off parole, before starting work, because until then he can't travel out of Los Angeles County. When that happens, he says, "I'll be just another citizen."

Several of his classmates who completed the course are already working, earning about $15 an hour; experienced installers can make upwards of $30 an hour. Philippe Hartley, general manager of Phat Energy, a Los Angeles solar company, has hired several Homeboy graduates. The Los Angeles Unified School District plans to start hiring some graduates of the program to install 50 megawatts of solar power on its campuses. "Being former gang members doesn't preclude them from building a career in solar technology," says Veronica Soto, a school-district director.

Others are also interested. "We expect to hire out of the program as quickly as they can get them to us," says Gabriel Bork, a vice president at Golden State Power, a solar-panel installation company. "These guys are much better trained than many others I have hired."

Write to Miriam Jordan at miriam.jordan@wsj.com


Printed in The Wall Street Journal, page A1

http://online.wsj.com/article/SB123457326090086555.html