This article ran in the July 2000 edition of Echo Newspaper

There was an odd celebration on Wall Street recently. Everyone was cheerful as the Nasdaq stock exchange rose over 200 points in a single week, the fastest in history. The event? The publication of a report from the Labor Department report. "From the Fed's [Federal Reserve's] point of view, this is a perfect jobs report.", said a highly placed financial services consultant from Boston. An economist from a New York investment firm was exuberant. "Around here we call this a blowout report. When you get one, it is almost an exaggeration, but it is pointing in the right direction," he said.

What information could a Labor Department Report contain that would cause such celebration? The report indicated that unemployment recently made the greatest single month leap in nine years. What was that about truth being stranger than fiction?

It would probably come as no surprise that unemployment is closely correlated with all manner of social ills. As unemployment goes up, so does aggravated assault, robbery, homelessness, even rape.

So why should so many people have such a grand celebration at other people's expense? . Current economic management practices in America rely almost entirely on monetarism; managing the economy by regulating the volume and cost (interest rates) of money. Our government controls inflation by maintaining a permanent underclass of chronically unemployed and underemployed people. These people serve to keep wages down by generating constant supply of workers willing to work for low wages. The Federal Reserve has been concerned about excessive growth in the economy lately, and thus have raised interest rates six times in the last year. They are now achieving their goal, an increase in unemployment.

The politicians will, as they always have, speak harshly about law and order, even as they pursue policies that create the opposite. The odd part is how visible, yet invisible, the whole process is. We have a war on drugs, the highest prison population in the world, and the death penalty. The purpose of these things is to distract the public away from the real causes of social distress. And it works.

Community economics has the power to change our circumstances. Money recirculated in a local economy multiplies its impact, creating greater social well-being each time it is respent. And mind you, money respent in a local economies does not generate inflationary pressure at the national level. Thus community economics can raise the standard of living of working class people without provoking the Fed's retribution. As the recent closing of the Con Agra plant in Crozet demonstrates, the decisions made by far-away powers can have enormous impacts on many of our neighbors. We can change the rules without waiting for permission from the big corporations or the Federal government. We can do it. by building our own localized economy.

The Community Economics column has been written by Tradelocal, a group of citizens working to build local economy, promote local culture, and protect the environment. Tradelocal offers a local business database at www.tradelocal.org and local business hotline (804)760-8628. We can also be reached at 912 Woodfolk Drive, C'ville, 22902.