MLT NEWSLETTER

SPRING 2009

MLT Board of Directors:

Rita Bober
Norm Bober
Ken Dahlberg, Chairperson
Maynard Kaufman
Ron Klein
Suzanne Klein
Michael Kruk

Jim Laatsch
Lisa Phillips, Treasurer
Michael Phillips
Thom Phillips, Managing Director
Jan Ryan, Secretary
Jon Towne, Newsletter Editor
Dennis Wilcox

Ben Brown grew up near Lacota and has been involved in MLT activities in the past. In February, he submitted an article on ‘Tiny Homes’ - a somewhat surprising (to me) subject. His article is prefaced with some thoughts he included in an April email on the majority white cultural understandings of housing and how they differ from those of minorities. They serve as a useful introduction to his article.

   As the recession disproportionally hits those that historically have had the least access to resources, I've had to downsize my tiny home aspirations further. While housing and location has been a cultural investment for majority groups, for others self-owned housing and property access have culturally offered the promise of simply being able to exist in this world. . . .
   While I have found legal allowances to build a tiny home, I have found financial challenges common among minorities, in spite of having regular income. Among those challenges are lack of any health insurance and lower income than my majority cohorts.
   Cultural understanding of housing availability has been strongly determined by ones access. Solutions that are viable for majority groups (even while changing in this present climate) can be an inappropriate solution for those with different access/investment models and resources.
   Traditionally, the response to minorities seeking housing has been to systemically continue raising the bar, while on a person to person basis, to counsel them to reach the same level of financial access before obtaining housing. The problem with that solution has been that the job market and living costs were never (and are not) on a level playing field. This has functioned to preserve more quality housing for non minorities and due to the systemic nature, remove awareness of actualities from the conscious thought of non minorities.
   Non traditional approaches like Habitat for Humanity, start with seeking to work within the framework of the people being serviced and bypassing many of the systemic hurdles in place. On the surface, placing the cart before the horse, in reality, providing a place for people without access to exist in our society enabling them to participate and advance in our economic system.
   Yet, Habitat cannot address all populations. The following article discusses this and presents a possible solution. The challenge is: If banks will not fund a non-traditional answers, will those with financial access challenge the present system.

Ben Brown, April, 2009

Tiny Homes

   An increasing number of people are buying smaller homes. At the extreme edge of the smaller homes movement are homes under 200 square feet. These spaces strain taboos of what we have culturally considered acceptable in our resource devouring America. Epitomized by companies like Tumbleweed Tiny House Company and the award winning Micro Compact Home, many of these are true residences for their owners.
   What are some of the justifications for tiny homes put forward by their residents?

• Instead of multiple rooms, each providing a specific function and empty most of the time, why not have a smaller space with fewer rooms each supporting multiple functions and better use of space. A tiny home owner explains, “You can only be in one room at a time.”
• The energy footprint required to build the dwelling actually approaches what nature can replace within the average person’s lifetime.
• Heating and cooking energy needs are a fraction of what McMansions require. Energy efficient because of good design, small size and with an appropriate investment in insulation, they are cheap to power. An Iowa tiny home owner's gas bill for heating and cooking for the year totaled some $150.00.
• Many owners of tiny homes mention feeling liberated from the material overabundance in America.
• On a weekly basis, household chores of cleaning up the large home add up to several hours or more. In place of feeling enslaved to care for the home, time is opened to cultivate oneself and life outside the building.

   While the tiny home can provide a sense of solitude and independence, paradoxically it can also increase interaction with others. Tiny homeowners make use of shared resources such as fitness Interior

facilities, rather than each home on the block owning its own tennis court or pool.
   The design for tiny homes can be clean and simple as a monastic cell, or embellished and elaborate as the most intricate of gypsy wagons (which were a historical tiny home on wheels) or as high tech as a “Star Trek halodeck”.
   Costs can range from $1800.00 in materials for an austere basic tiny home to some $90,000.00 for a fully electronic, digitized, flown and dropped in place, technically edgy 84 square foot abode for two. It is possible to find tiny dwellings in New York for a $1000.00 a month where they are considered a good bang for the buck. The nice thing about tiny houses are that the skills needed to build a very respectable one or to put together a kit, can be easily acquired.
   How does this impact on land use? In my case, it opens up doors to being able to afford ownership of both a home and land on which to farm even if my income is a fraction of middle class standards. Rather than spend most of my energy on servicing a $150,000.00 mortgage that will become $300,000.00 to $400,000.00 in payments over its lifetime, I can pay off my dwelling in a fraction of the time at a cost of somewhere in the area of $8,000.00-$15,000.00. My life energy doesn’t have to revolve around my home debt or rent.
   I’ve spent over 30 years paying rent, because for a majority of those years I couldn’t afford the median home price. I also don’t want to spend over a decade fixing up a place followed by still more decades worried about losing the home to the bank. Even with two college degrees most of my career positions have paid only slightly more than minimum wage.
   Tiny homes open up a way for the poor to become self-sufficient and to reduce their footprint on the earth in a way serving a landlord or bank does not allow. No, tiny homes are not for everyone. They are an answer for singles, which our society has no good answer for in the present financial crisis. Yet as our cultural and self definitions change in the face of need, those who find tiny homes a good fit will find it easier to walk softly on the earth.

Ben Brown has kept his interest up in energy efficient housing for the past 30 years and lent his support to groups like Habitat for Humanity, VISTA, Ecology Action, Jubilant Gardens Project, Growing Hope as well as several alternative energy businesses and organizations. He is presently seeking ways to make his tiny home happen.

Rita continues her informative series on useful native plants:

Common Elderberry

By Rita Bober

As we get closer to spring, I begin to think of the many native and wild plants in our area that will begin to re-emerge from their winter sleep. One of my favorites is Common Elderberry (Sambucus Canadensis). Elderberry, a member of the honeysuckle family, is a shrub and can grow up to 25 feet high. I have found two Elderberry shrubs growing on the north side of the woods at the end of our property. The first thing that strikes me about the shrub is when the flowers come out in the spring. They look so cool – white, lacy, branched, tiny flowers in flat-topped to slightly rounded clusters (panicles) that can spread over 6 inches across. They look like little umbrellas. Both the flowers and the purple-black berries that come later in the summer are edible. They also have medicinal qualities.
Elderberries are soft-wooded shrubs often found in ditches near roadsides, in moist woods, and in swampy areas. The plants have opposite feather-compound leaves that may be over 3 feet long. The leaf is divided into five to eleven opposite, coarsely toothed, pointed, short-stalked elliptical leaflets about 3-4 inches long. The stems have conspicuous white lenticels and there’s a white corky pith inside the stems. Don’t confuse red-berried elder (Sambucus pubens) with the blue/black Elderberry. Red elder is easily identified by its conical flower, fruit cluster, red berries and its orange pith. Both Elderberry flower

species have poisonous vegetative parts. For the Common Elderberry, use only the fruits and flowers. None of the Red elder is usable.
   The flowers of the Black elder are used either fresh or dried in a tea or other food recipes. For example, you can make elderberry fritters by separating the fresh flower heads into smaller sections, about 1-2” across, and dip into a flour, milk, and egg batter. Deep fry them and serve with maple syrup. The berries that ripen in August are excellent in pies, jams, jellies and for wine. The berries are pretty tart and you may not want to eat them raw, but dried they taste something like blueberries. When gathering flowers or berries, be sure to leave many on the shrub to minimize damage to the tree and surrounding habitat. Elderberry is an important food plant for a variety of birds and many mammals like deer. It is an effective pollinator attractor especially by bees during its bloom period. The berries have few calories and lots of nutrition such as large amounts of potassium and beta carotene. They also provide calcium, phosphorus and vitamin C.
   Elderberry is astringent and diaphoretic - good for colds, excessive mucus and sore throat. This is useful for moving mucus out of the upper respiratory tract and for inducing sweats during a dry fever. Recent studies also indicate that Elderberry can be effective in reducing the effects of the flu. We have used a tonic of Elder berries at the first signs of the flu to effectively reduce symptoms and the length of time we are ill. I have made a mixture of the berry juice with an equal amount of raw honey to use for the flu. Elderberry also has diuretic and detoxifying properties - eating them may help one to lose weight. The flowers have been used in cosmetics from very ancient times. Elder-flower infusion is said to cleanse the skin, lightens freckles, and sooth sunburn. Through its bioflavonoids, it promotes circulation and strengthens the capillaries. Some herbalists use it to soothe children’s upset stomachs and relieve gas though I think catnip tea is good for this. Among its many uses, you can boil the flowers in vinegar to make a black hair dye. Some say that Elderberry wine may have anti-arthritic properties.
   As you can see, there are many uses for this special shrub. Anyone who has Elderberry shrubs on their property is truly blessed. Become familiar with this shrub so you too can enjoy its many gifts.

References:
   Edible Wild Plants: A Guide to Collecting and Cooking. Ellen Elliott Weatherbee and James Garnett Bruce. Self-published, Ann Arbor, 1982.
   From Earth to Herbalist: An Earth-Conscious Guide to Medicinal Plants. Gregory L. Tilford. Mountain Press Publishing Company, Missoula, Montana, 1998.
   Identifying and Harvesting Edible and Medicinal Plants: in Wild (and Not So Wild) Places. “Wildman” Steve Bill with Evelyn Dean, William Morrow and Company, Inc., New York, 1994.

MONEY: PROBLEMS AND ALTERNATIVES

Maynard Kaufman

Although money has some useful functions in our society, the main problem most of us have with money is that there is not enough of it. This is primarily because of the way money is created.   Only coins, which constitute about one thousandth of the money supply, are minted by the government and put into circulation.   All other money, including bills, or paper money, which is printed by the Federal Reserve System and purchased by the government for distribution, is created out of nothing and lent out by banks who charge interest on it. Money is created out of debt.

Here is an illustration of how the system of debt money works. If we take out a loan of $100,000 to buy a house and pay 6% interest on that loan, in twenty years we have to pay back the bank $200,000. The bank provided only the first $100,000; the borrower has to compete in the real world to earn the second 100,000. The borrower cannot, like the bank, create the money out of thin air, he or she has to work to earn already existing money to pay the interest on the loan. This has created a society of highly competitive money-grubbers.   And still there is never enough money to go around.

Another problem with the way new money is created by banks is that it forces economic growth in our society. Borrowers can pay their debts only by making more and more money, and this is possible only if there is a growing economy. This is good for those who think the economy is more important than ecology, but in the end it leads to the degradation of both. It worked as long as there was lots of cheap fossil fuel energy to sustain economic growth. As the price of energy rises and the greenhouse effect gets worse, we face the end of economic growth and with it the collapse of the economy.

The shortage of money is exacerbated for those who have to pay interest, and it is manifest in the growing disparity of income between rich and poor in our society. Interest is a very effective mechanism for the transfer of wealth from those who have less to those who have more. According to Ellen Brown, in her book, Web of Debt, “The very wealthiest 1 percent of Americans owned a bigger piece of the pie (33.4 percent) than the poorest 90 percent (30.4 percent of the pie). (p. 275)   This disparity threatens our democratic institutions; in many ways we have already become a plutocracy, ruled by the rich. Money is power.

Finally, the shortage of money is more acute for consumers now than it was in the past.   One way in which the economy grows is as people’s needs are provided by the market economy rather than by the household economy. For example, consider the growth of the fast food industry. Many people used to raise food and prepare it for meals at home. Now they go to McDonald’s and pay money for food. The same is true for many other aspects of modern life, all of which require money and add to economic growth. But there are limits to growth. According to writers who try to explain the money crises, we may be approaching a major transition in the money system which will change our way of life.

As people come to understand how the money system works, or fails to work for them, they will demand changes. But so far there are few articles in popular magazines about how money is created. And when people see the words “Federal Reserve Note” on their bills they are led to think the government has printed that money for them.   But the Federal Reserve Bank is not exactly an agency of the federal government. It is a consortium of private banks with vague oversight by the federal government.   The President appoints the seven members of the Federal Reserve Board, but policies of the Federal Reserve System are made by the Board and by representatives of the twelve Reserve banks which are privately owned. And, the sub-title of William Greider’s massive book on the Federal Reserve System, Secrets of the Temple, is revealing:   How the Federal Reserve Runs the Country.   Greider shows that the Federal Reserve System is consistently more concerned to preserve the stability of the money supply than to foster economic vitality for the benefit of the people.

This brief review of the problems caused by the way money is created and lent into circulation can lead us to assume the problem is usury, or excessive rates of interest. This is the emphasis in a couple of articles in the April 2009 issue of Harper’s Magazine.   The article by Thomas Geoghegan, “Infinite Debt,” is excellent, and explains how excessive interest rates have diverted money from the manufacturing sector to the financial sector and thereby weakened the economy. It is a useful and persuasive article, but it does not go deep enough. It fails to explain how the way money is created out of debt is the root of the problem.   Apparently this topic is taboo, and only a few writers on the money crisis have tried to break the taboo with a radical interpretation of the money system. One of the most recent is Ellen Brown in Web of Debt, which uses The Wizard of Oz as a narrative frame to tell the story of money in American history.

It is indeed possible to abolish interest or to reduce interest rates, but not if interest must be paid when money is created. As long as money originates as debt the debt will be passed along. We are all entangled in a web of debt. But the abolition of interest is not allowed to happen because the government serves banks rather than the people. The banks, however, do not own the money they create and lend out. As Ellen Brown and others have argued, instead of allowing banks to lend money into existence with interest, the government should affirm its constitutional mandate to coin money and spend it into existence without charging interest. This is the fundamental reform needed in our money system. Now, as banks are verging on insolvency and seeking bailouts by the government, is a opportune time to recover a money system that works for the people rather than the banks.

But how can it be that banks, who charge interest on the money they create, are on the verge of failure?    The short answer is that borrowers are not repaying the loans they got from the banks. According to Ellen Brown, (pp. 282-287) large banks lured people to borrow money to buy homes at low interest rates, but they were “adjustable rate mortgages,” and when the rates went up and real estate values declined many borrowers defaulted on their mortgages. These are the so-called “sub-prime mortgage defaults,” and they are continuing. Rising prices for energy have added to the burden of interest payments so that many people are losing their homes.

In addition to their bad loans, banks have also exceeded their fractional reserve limitations. Traditionally, banks were allowed to loan out up to ten times the amount of deposits they have, but in recent years, with deregulation, they have been making more and more loans on based on less and less capital. They were thus unprepared for losses from the sub-prime mortgages. This was discussed in a Time Magazine article, “Why Your Bank is Broke,” in the February 9, 2009, issue.   The largest banks have also been making bad investments, especially in derivatives and mortgage backed securities.

The net result is that some policy-makers are considering the nationalization of banks. Ellen Brown provides evidence that many banks are already bankrupt and that there has been a de facto nationalization of the financial industry (pp. 326-329).   If the government were to overtly take over the ownership of the banking industry, and if it were to provide money for the people without interest, it might be a solution to the problems that the banks created.   In some ways the incentive payments proposed by the Obama administration are already doing this, as is the spending on infrastructure and renewable energy. The traditional argument against such spending is that it would be inflationary. But it would be no more inflationary than the trillions of dollars created by the financial industry.   Brown argues that inflation would be avoided by increasing supply and demand together and thus reinvigorating the economy (p. 423).

Ellen Brown’s book makes it clear that the major reform needed in the money system is for the government to provide money without interest. This was the plan proposed by the late nineteenth century Populists, and it would serve Main Street rather than Wall Street. Several writers on money, including Michael Rowbotham in The Grip of Death: A Study of Modern Money, Debt Slavery, and Destructive Economics, urge this fundamental reform and suggested different ways in which it could be done.   More recently theologian John Cobb, who co-authored For the Common Good with Herman Daly, also urged, in a forthcoming article, that the government should provide interest-free money. Both Brown and Rowbotham discuss precedents for the government printing money.   North Dakota has a state bank that advances credit for public purposes. Abraham Lincoln had the government, rather than the banks, provide money to pay for the Civil War. After he was assassinated the banks once again grasped the right to charge interest on the money they created.   Banks are powerful institutions in our society and they would oppose this kind of reform since they profit from the interest they receive on the money they create. And now they also benefit from the bailout by taxpayers.

Another possibility, urged by other writers on money, is an alternative to our total dependence on the money generated by banks. One of the earliest promoters of this possibility was Thomas Greco, a writer I first met at a Green Politics gathering. He self-published New Money for Healthy Communities in 1994 and has worked with Michael Linton, who developed the Local Exchange Trading System (LETS), a system of mutual credit that can operate within a community and strengthen it. Several years Michigan Land Trustees sponsored the formation of a LETS system in Bangor. Sometimes it is called Local Employment and Trading System, and it is indeed a system that is work-enabling. The most comprehensive review of such complementary currencies (and there are many all over the world) can be found in a book by Bernard Lietaer, The Future of Money. Lietaer makes a compelling case for the necessity of such community-building and work-enabling currencies alongside of the official money system. He argued that such a yin-yang arrangement can create an integral and sustainable economy based on both social and financial realities. He explained the four megatrends that are forcing the need for change in the existing money system: (1) monetary instability as the virtual financial economy (he calls it a “casino economy”) is displacing the real industrial or manufacturing economy, (2) climate change and ecological degradation, (3) the information revolution and a growing cyber-economy, and (4) the growing proportion of elderly people in most developed countries (Lietaer, pp. 7-15). Since Lietaer published his book in 2000, we might add peak oil and its economic repercussions to the list as a fifth megatrend.

   We began this discussion of money with several paragraphs describing the socially destructive aspects of a money system based on debt.   The problems with our money system are getting worse as the recession deepens and more and more people lose their jobs.   One of our political tasks during this time of economic meltdown is to remind legislators of their obligation to serve the people with a money system that does not impoverish them. In addition to paying interest on the money we borrow, we, as taxpayers, now have to bail out the financial corporations that caused the economic meltdown. This is outrageous, and if Americans weren’t so befuddled, or complacent, they would be up in arms. Ellen Brown, who provided a postscript in her book with an update in December 2008, pointed out that “by December 2008, the total payments, loans, guarantees and commitments made by the Fed and the Treasury for bailout purposes tallied in at $8.5 trillion - - roughly half the gross domestic product of the country” (p. 476). This includes 5.4 trillion in loan guarantees made as Treasury Secretary Paulson put Fannie Mae and Freddie Mac into conservatorship, which is a form of bankruptcy. Brown continues to update her readers with articles on her website: www.webofdebt.com/articles.

What can we do to fix the money system?   We can be fully informed about money and alternative possibilities and discuss these issues with our friends and neighbors.   A better system is possible if we demand it. We can also help in the development of some form of complementary currency in our city or neighborhood.   These will be of increasing importance during this time of rising unemployment.   A total dependence on money is destructive of community.   When we depend on cash we buy independence.   But an economy based on relationship rather than cash alone can build community.   Lietaer pointed out that the word “community” derives from two Latin roots: “cum, meaning together, among each other, and munus, meaning the gift, or the corresponding verb munere, to give. Hence ‘community’ = ‘to give among each other’ ” (Lietaer, p. 182).    Whether or not the official money system can be reformed, some kind of community currency would help us evolve from a nation of competitive money grubbers to people who can cooperate with their neighbors.

Finally, we can remember and remind others that usury has been prohibited in Judaism, Christianity, and Islam. This little essay on money should help us understand why they did so, and why creating money out of debt is, to say the least, morally ambiguous.

Since I was not trained as an economist, there is much I do not understand about money. It is not clear to me, for example, why so many writers who do seem to understand money do not
raise questions about the fact that banks can create money out of thin air and then charge interest on it. Are they missing something, or are the few writers who critique the present system missing something? Even William Greider, who leans to the left politically, and sympathetically reviewed the Populist demand for interest- free money in his chapter on “Democratic Money,” seems unwilling to join or affirm the Populist demand.   He simply reports that it was considered too radical to be adopted. The money system is difficult to understand also because economists deliberately obfuscate the truth about money. Greider concludes that the veil is drawn over the creation of money out of thin air to keep people from understanding the secrets of the temple. The taboo is necessary to preserve belief or faith in a system that serves the interests of capitalism more than the interests of democracy.    In The Wizard of Oz it is Dorothy’s dog, Toto, who pulls aside the curtain to expose the fraudulence of the Wizard.   Where is Toto now that we need him?

(Editor’s Note: Maynard will be glad to respond to comments on and critiques of this article. Send them to him directly at maynard.kaufman@wmich.edu or to the editor. Maynard is working on another article describing some community currency plans, why they will be necessary, and how they could be organized.)

Announcement!

The public is invited to join us for farm tours at 1:00 pm on July 26 beginning at Blue Dog Greens near Bangor. They will continue then to Jon Towne and Bobbi Martindale's small farm, followed by a tour of Maynard and Barbara's “off the grid” homestead. Also, for those interested, there will be a potluck at 5:00 pm at Maynard and Barbara's, followed by a meeting of the MLT directors. Email us at ken.dahlberg@wmich.edu or tomar@i2k.com for details and directions.

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