The Great Near (& Far)
Relationship-based lending, ESG, postal banking, drained pool politics, & universal basic rent...
Hey folks. This is the 14th edition of The Great Near. Through the end of the year, I’ll be thinking about “TGN 2.0.” This newsletter started off as an experiment, and though I’ve been pleasantly surprised by how many of you have stuck around or shared TGN, I’m planning to re-launch in 2022 with a refresh and a bit more regularity. You can drop a note here with your feedback to shape 2.0.
Until then, I’ll be sending a weekly curation of content that might push your thinking about power and the systems that shape our lives. I’m talking about the economy, public policy, finance, capitalism, the social sector, and more. Follow along for new research, op-eds, hot takes, my favorite explainers, the best learning resources, and fun nuggets so that our heads don’t explode. What fires you up? What questions do you have? Drop a note in the comments to start a conversation.
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The Great Near (& Far) 👀 ✨
A reason to celebrate — New York City is expanding a pilot program to give every public school kindergartner $100 in a college savings account. This means 70,000 students will gain an account projected to be worth around $3,000 by the time they graduate from high school. While this is admittedly a small amount, there are tons of studies to suggest that small sums of money significantly raise the probability that a child will pursue higher education. Credit goes to NYC Kids RISE for leading and expanding this program in partnership with the city.
A policy update — As Oscar Perry Abello wrote in Next City recently, “If you’re in favor of the status quo when it comes to banking and basic financial services across the country, it hasn’t been a good few weeks for you.” There are reports that the U.S. postal service is quietly taking steps towards postal banking to provide basic financial services to the millions of Americans who do not hold bank accounts. A pilot program was recently launched at four branches. Los Angeles and San Francisco also passed legislation to draft plans for city-owned public banks. These public banks would hold municipal funds (not consumer deposits) to divest them from private banks that may invest in things that run counter to constituent values, like private prisons or fossil fuels. Though some will inevitably protest the idea of government-owned banks, The Bank of North Dakota has provided us with a shining example of success for over a century. This may be the greatest momentum around true democratic banking reform since 2008. 💪
A fantastic resource — This feature on Reenvisioning Rural America from Urban Institute is superb. ✨ It’s an interactive dataset that allows you to segment rural communities into sub-groups, like “energy-rich hubs” or “high employment agricultural areas,” and then compare how each fare on seven types of community capital, like infrastructure or natural resources. I learned that “diverse institution-rich hubs” have the best access to health facilities and community investment, but the worst air quality, broadband, and life expectancy. These insights are great resources for policymakers, researchers, and community advocates making the case for specific infrastructure investments.
Something to send to your contact book — I know I said the last thing was cool, but this interactive learning journey might take the cake. Created by Take on Wall Street, it interrogates whether our economy was designed to be fair. They make the case that economies are created by design and explore fourteen moments in U.S. history where injustice was baked into our economy and often state-sanctioned. It covers historic moments like the Tulsa Massacre, where rioters destroyed an estimated $200 million in Black property in today’s dollars, to present-day events, like the explosion of a private-equity-owned chemical plant in Texas that forced over 500,000 people to evacuate. It’s not comprehensive, but it’s the best educational resource I’ve seen that illustrates the idea of “systemic inequality.”
A debate — ESG investing (fancy language for sustainable investing) is getting a lot of attention this year, partly due to the “whistle-blower” comments from Tariq Fancy, former chief investment officer for sustainable investing at BlackRock. Emphasis added because many have criticized his “it will never work” attitude. There are endless guides for consumers for how to invest responsibly (this one’s not bad), but frankly, the advice only goes so far because the ESG system isn’t set up to actually work. As this Vox article by Emily Stewart suggests: “you can’t save the planet with your Robinhood account.” She suggests that the government must shift incentives for companies to put sustainability in their best interest, and it can start by creating standard ESG reporting requirements for companies and investors alike. A quote to appreciate: “People with a pension fund to live off during retirement also, presumably, want a planet to live on. Regulators need to open the door more for managers to take that into account.”
A must-read — Jaime Gloshay and Vanessa Roanhorse of Roanhorse Consulting and Native Women Lead—two organizations that raise capital for Indigenous-women-led ventures—published an essay in NPQ about their experience building a loan product for Indigenous entrepreneurs. I learned more about their relationship-based lending approach and the barriers to lending on Native lands. Not only are many people cautious to take debt from banks that have engaged in predatory lending practices in their communities, but many banks won’t even do business with Native entrepreneurs given the difficulties of collateralizing property in a sovereign state. Jaime and Vanessa offer four direct actions to support Indigenous entrepreneurs, including “build(ing) new power in place.” If that’s a new idea for you, I highly recommend this read.
ICYMI — Ibram X. Kendi, author of several books including “How to Be an Antiracist” published a sobering essay in the Atlantic that reveals the distortion of Martin Luther King Jr.’s legacy in the conversation about critical race theory. Though it may not change hearts and minds—just see how opponents respond to King’s children contextualizing his work—it’s thought-provoking in a moment where the telling of history in schools is under attack.
A deep dive — Data released this month suggest that local labor markets are adversely affected by higher bank concentration (when a few large banks control a greater share of local assets). Bank Concentration, Local Labor Markets, and Black Neighborhoods, a new paper by Robert Mann, makes the case that local small business lending decreases with higher bank concentration, which then increases unemployment. While we already know that bank consolidation leads to decreased small biz lending, this is the first paper to show that the effects are especially acute in Black neighborhoods. This data bolsters the Biden Administration’s anti-trust agenda and helps make the case for greater investment in community financial institutions.
A spin on universal basic income — Local and federal housing officials are quietly discussing a new take on UBI: universal basic rent in the form of cash payments to low-income renters in place of vouchers. This nascent idea emerged in a meeting between officials last month, and a new study kicking off in Philadelphia next year will assess the effectiveness of this approach. Any serious conversations of this will likely be met with resistance—as with all cash transfers that remove red tape and the “time tax” for poor people—but the discussion is promising.
A substack I’m learning from — The Profile studies the most successful and interesting people and companies in business, entertainment, tech, sports, and more. Polina’s deep dives are fabulously informative 💯
A podcast to make you think: “What Drained-Pool Politics Costs America,” is a conversation on the Ezra Klein Show with the author Heather McGhee, about America’s zero-sum politics. She crafts a metaphor around the real example of a drained public pool, speaking to the phenomenon where white communities in the 1950s and 60s chose to drain public pools rather than let Black families swim too. Mcghee argues, “when we continue to allow the zero-sum story, the idea that progress for one group comes at the expense of another, it’s a lie that we are buying into, and it’s a costly lie.”
A quote — Adrienne LaFrance calls Facebook The Largest Autocracy on Earth
“The freedom to destroy yourself is one thing. The freedom to destroy democratic society is quite another.”
until next time,
-Caitlin