Currency Project A Potential Boon for Think Local, Buy Local Movement

From Santa Cruz Patch
By Niko Kyriakou
September 30, 2010

Project A Potential Boon for Think Local, Buy Local Movement

New Earth Exchange could change the way people spend money in Santa Cruz.

A tourist from Reno, Nev., recently told me what an impression his visit to Santa Cruz had made on him.

"So many people are out enjoying their community, down to the street musicians. It felt very nostalgic like an old-fashioned American town, but filled with a very eclectic, modern crowd. In Reno, you kind of get scared and don't want to go downtown anymore."

These comments were a good reminder as I start this first column on Santa Cruz's work to support local, buy local and think local. The fruits of those efforts are all around us – the friendly folk, the heterogeneous storefronts, treelined streets, First Night, Boardwalk summer concerts, Volunteer Centers of Santa Cruz County, Free Skool, homeless services and too many others to name. But people who love this town often don't realize that localism is the secret sauce.

With county unemployment at 11 percent and the Great Recession not far behind, some of the most practical work being done to support local involves extending financial lifelines to homegrown businesses, the under-employed, and the unemployed.

One of the newest phenomena in this arena is New Earth Exchange. Comprised of some 20 volunteers, the organization plans to launch a cash, card, and online currency for Santa Cruz County this February.

The currency will be exchangeable only among county residents and locally owned or controlled businesses – preventing it from draining out of the area. Annual transactions could add one million dollars in to county business, according to organizers, who also envision making grants and loans. Two hundred businesses and residents are already interested in signing up when it's ready, and New Earth aims to persuade more at a public talk about the currency on Oct. 12 at 6:15pm, in Room 301 of the Louden Nelson Community Center.

Julie Kellman, 37, owner of Seascape Foods in Aptos, plans to join the cooperative that will manage Cruz dough. Membership will cost around $10 per person and $150 per small businesses. The money will initially enter the economy when businesses hand it out to customers as discounts – not unlike a rewards system.

"I think it allows the consumer to make easier choices to support local by doing the point system and giving them discounts. The consumer will benefit as well as the small business. It's a two way street," Kellman says of the currency.

The Santa Cruz money is based on a 3-year-old alternative currency running in Sonoma County, called Sonoma Dollars. Both those systems mimic the Wir Bank in Switzerland, founded in 1934. Twenty percent of Swiss businesses use the bank's e-currency for some $1.65 billion worth of transactions a year.

County government is also taking steps to revive the economy. Santa Cruz County will soon provide more low interest loans through the Grow Santa Cruz project, and county planners have put together an 834-page document detailing which of the county's purchases can be made locally.

The County has also made the bold step of joining the Move Your Money Campaign. The movement calls on communities around the country to move their money out of mega-banks and into community banks which received far less bailout money yet do more than their share of lending.

Early this year, local banks and credit unions saw an upsurge in new accounts as a result of the Move Your Money movement. Now the County is shifting $600 million to $800 million worth of liquid assets to local banks and unions.

Storing money locally protects the county's access to loans, says Peter Beckmann, cofounder of Think Local First and owner of Beckmann's Old World Bakery.

"If Wall Street gets into trouble, our little credit union doesn't care because they have member money and they don't speculate in highly volatile financial instruments. They will keep giving loans — Beckmann's Bakery never had a credit crunch."

This may not be in Reno, but as in the casino-filled, 'biggest little city', we still need money. Lucky for us, some forward looking, community-minded Santa Cruzans are working to localize money — to recycle it here, and soon, to create it here as well.