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Does Detroit Need Its Own Wall Street?

I've heard a lot of intriguing ideas about reshaping our communities over the  years, but one that's always stayed with me has been the notion of attracting investment into local businesses through a community stock exchange. I can't remember where I first heard the concept, but it's seemed to make sense to me from the very moment I heard it, and I always wondered why more people didn't at least explore the idea -- especially in places like Detroit.

There are assorted iterations of the concept, but my on-going fascination with TEDx (shout out to TEDxDetroit at Wayne State, too) recently led me to a video clip featuring a cat named Michael Shuman, who is the director for research and economic development for the Business Alliance for Local Living Economies (BALLE). Shuman's the author of a book called The Small Mart Revolution, which came out two years ago. He's also an economist,  an attorney and a devout advocate for the advantages of small and localized businesses amid increasing globalization.

In the clip, he gives one of the best explanations I've heard yet of how local stock exchanges can work. Shuman's take seems simple enough: Investing in local businesses will make for much the national stimulus we so desperately need, and local stock exchanges are an ideal vehicle to help get us there. Since I can't possibly do the man's ideas justice in this short space, I'll just let you check out his speech below and make your own assessment. (You can also read this piece he wrote on topic if you feel like downloading the pdf.)

After you vet the ideas Shuman puts forward, let me know what you think: Could an idea like a localized stock exchange, on a city or state level, say, work to revive Detroit?

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  • 1

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  • 2

    I think this is a terrific idea. In addition, I like Virg Bernero's idea of a state owned bank to support loans to Michigan's small businesses.

    Michigan is dependent on Wall Street for financial support and to a lesser degree, West Coast money. Together, the Coastal types couldn't give less of a rip whether we sink or swim. We are "Fly Over Country" to them, worthy of nothing more than the crumbs that fall on the floor.

    Our own stock exchange and independent banking system dedicated strictly to Michigan businesses would give us the independence from Wall Street's control that we need.

  • 3

    This sounds radical. I can't find anything wrong with the concept, except that it would require our larger, privately held corporations to go public? I think that most small businesses are not willing to divest more than 50% of their company, and because many Detroiters are not rolling in money right now, it's not like there's a lot of startup capital out there. Thus, it would require outside factions to invest in Detroit businesses, and that takes us back to square one.
    Am I a negative nelly?

  • 4

    Super idea!!! Let's start right now by deflecting the revenue we spend in the DOD to Detroit and other urban venues....

    BTW ssalasi100 I look forward to critical analysis of ideas not the indictment of people...I enjoy reading your insights negative nelly or not:-)

  • 5

    We had The Detroit Stock Exchange years ago when there was no global finance. They folded after several years because no one came to their exchange and there was no business. [ Do your homework people!]
    At best, this is a lifestyle business, but by the time the regulators get done with them, there will be nothing, absolutely nothing. This might make an interesting hobby for someone, but even that is a longshot. Nice dream, but get real ! Have you ever heard of the SEC?
    This is DBIS [ entrepreneur speak for Dead Before It Starts ].

    • 5.1

      Hello deeetroit,

      The dream CAN be real. Your point about the regulators is well taken. The regulators could in fact put major kinks in this if the regs are not closely considered.

      However, what if I told you someone has already done that leg work? Would that change your mind?

      Because someone has, and it turns out a local 'exchange' (like mechanism) fits well within SEC guidelines.
      (I have ample substantiation if you need it)
      Anyway, what if the SEC is not a problem here. Then what?

      Our group has just such a plan and we are very close to launch.

      Bob Leonard
      Commonwealth Group

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