“It’s an economic war.” Warren Buffet delivered this mic drop moment on his recent CNBC interview with Goldman Sachs’ CEO, David Solomon. During the interview, Buffet had a specific request to lawmakers: extend the Paycheck Protection Program.

Now I’m not here to talk about the Small Business Administration, nor will I venture into the failures and successes of the previous PPP round. The reality is, Mainstreet is getting hammered and most options need to be left open as Americans scramble to save small businesses. That said, we need to be careful about how we approach potential solutions. My goal here is to briefly drive home a particular perspective and one of our fundamental commitments here at Vicinity.

I’ll use the words of Charles L. Marohn, Jr., author of Strong Towns:

As an unprovable article of faith, I believe that a financially strong national economy is the byproduct of having financially strong cities, towns, and neighborhoods…

In short, I believe that economic strength is built from the bottom and works its way up, like a foundation supporting a structure. I do not believe that a focus on success at the national level will result in enduring, fine-grained prosperity in our local communities.[i]

If you’ve been following Vicinity, you’ve probably heard our belief that strength is built by bearing weight. Our communities become stronger as we take responsibility and lift each other up. This happens in all kinds of ways. Communities are complex systems with quite an array of stakeholders. Think about just a few of them that make up a town or city: individuals, families, private companies, public utilities, elected officials, churches, schools, foundations, and community development organizations.

In addition to diverse stakeholders, we have natural and financial resources. Not only do public and private organizations have dollars, but individuals and families have a vast amount of financial resources currently resting in places far away from their home. In the name of retirement, the average everyday investor has exported most of their financial resources outside of their own community.

All the while, credit for small and medium sized businesses has tightened up. David Solomon reinforced this fact. “The steps that the Fed and Treasury took to put liquidity into the market have certainly helped large businesses,” Solomon said. “But small businesses don’t have that access.” You can rest assured that Goldman Sachs will be taken care of in all of this. But newsflash: Most of the big guys aren’t in it for the little guys. 

Why should small biz beg for crumbs from the big kid tables when there are enough ingredients surrounding us to bake a continuous supply of bread? Beware, desperation has a way of fixing our attention on the gifts while remaining blind to the strings. Short-term relief feels good and is sometimes necessary but increased debt, increased dependence, and ultimately a decreased value of our dollar won’t feel as comfy.

This sort of approach has even infected the world of investment crowdfunding. “What America’s independent restaurants need,” says Sherwood Neiss, principal of Crowdfund Capital Advisors, “is a comprehensive reboot of how they capitalize their businesses. This includes not only emergency support money to get them through this darkest period, but a way to engage customers as investors, leverage these investors as marketing/sales agents, drive diners back to the tables, and help reinvigorate local economies.”

Ok Sherwood, we’re trackin’ with you. At this moment, you’re the preacher and we’re the choir. But then… “Local restaurant customers lend/invest money to the restaurants they want to support. When the restaurant reaches its funding target, a government co-investment fund follows local investors in their support of their own restaurants.”

At this point, we’ve entered Sherwood forest. Robinhood (although a thief in his own right) would not approve. Call us crazy, but we think it’s time to cooperate and deploy capital at a local level. At Vicinity, we are not in the relief business but we want to do our part as individuals and community members. We are hearing the stories of great businesses in our communities needing credit or capital while availability continues to tighten up, despite national efforts to provide “relief.” Distant bureaucracies don’t stand a chance when it comes to really understanding and solving problems in our local business communities.

Obviously, this rant was not intended to be a how-to guide, but rather a call to action on the part of communities nationwide. We can do some of this on our own. We’ll agree with Mr. Buffet in that it feels like war for sure. And lawmakers at the national level surely play an important role. But we don’t need congress to do all of our fighting for us. We need to get creative and tap into the abundance of resources surrounding us right here at home.

[i] Charles L. Marohn, Jr., Strong Towns: A Bottom-Up Revolution to Rebuild American Prosperity (Hoboken, New Jersey: John Wiley & Sons, 2020), 85.