The Popsicle Index: Drugwar.com

The Popsicle Index

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As First Published in the July, 1999 issue

A Conversation About the Popsicle Index

by Catherine Austin Fitts, Contributing Editor
www.solari.com

When I was a kid, the way our neighborhood would figure things out is by sitting on the stoops in front of our homes and having a conversation. Some conversations lasted an evening, some conversations went on all summer and some---like who was a better hitter, Ted Williams, Willie Mays or Hank Aaron---were still going on when I left town. Conversations were our way of finding out what gave us meaning. Conversations helped us understand problems and find solutions. Conversations were how we got smart because no one was as smart as all of us.

I was thrilled when Mike offered me the opportunity to write a column for From the Wilderness. I learn and have fun. Best of all, a column in From the Wilderness gives me a “stoop” from which I can have conversations with you. The From the Wilderness readership represents the richest accumulation there is of practical wisdom about institutional deviancy in America. This is a readership of people who have the wisdom to face the greatest risks and who can help me figure out how we build wealth in a way that outperforms and bests those risks.

CIA drug trafficking is like most deviancies -- a symptom of a deeper spiritual problem. My interest lies in developing economic maps and tools that will help us reengineer our investment of time and money to support sustainable spiritual solutions. Integrating spiritual principles into our management of resources is a necessary step to realizing the blessings and avoiding the risks of our new technologies.

The economic models that we used in an industrial age are not compatible with the developments of the last three decades. New technology increases our interdependency. That increases the damage that our mistakes can do to each other. If we want a practical example of how this works, step back and take a look at how Y2K will impact our lives. Y2K is a taste of “old model medicine”. It is what happens when we integrate microchip technology into an old “win-lose” economic model in which people keep their conversations to themselves and do not share their maps and tools. We get a big mess.

Edward Deming once said, “There is no such thing as bad people, just bad systems.” That’s my approach. While a jail term is a more appropriate response to Bill Clinton’s and George W. Bush’s past conduct than the rewards they seek and receive, punishment and scapegoating are not transformative strategies. Changing our incentive system is.

Our current financial system encourages bad behavior. People who use drug capital to finance their merger deals or their presidential campaigns get ahead. Part of the reason is that the corruption has become deeply embedded in our financial system. The problem is all of us. There are more people in America addicted to drug money---whether drug industry jobs and profits, purchases, investments, fees, related real estate profits or campaign donations---than there are addicted to drugs. That means people face an increasingly widespread resistance to doing things right.

I am a high performance, ethical person whose firing by the Bush Administration was on the front page of the Washington Post. I had $100 million of equity in my investment-banking firm and my personal financial assets were targeted and destroyed by the Clinton Administration. I speak from experience when I say that that the financial incentives of leading an ethical professional life in Washington and on Wall Street are reaching new all time lows. The solution is not for everyone to stand up and be a hero at extraordinary personal cost. The solution is systemic change.

Until we can make sure that men and women can protect their family's financial security by doing the right thing, where they live, a spiritual transformation is going to be a slow, sticky process. I am editing this column at my mother’s kitchen table near Bolivar, Tennessee. I completed the first draft of it in my office in the Edgewood community in Washington, D. C. I live and work in both Bolivar and Edgewood because the solution will come from the porch stoops along Main Streets of both city and country. It begins with a conversation about the Popsicle Index and how we create jobs and build equity for ourselves that will make Popsicle Index go up.

The Popsicle Index

What’s the Popsicle Index? The Popsicle Index is the % of people in a community who believe that a child can leave their home, go to the nearest place to buy a Popsicle and come home alone safely. When I was a child growing up in West Philadelphia in the 1950’s, the Popsicle Index was 100%. We were a modest neighborhood, even poor by some standards. But we were rich in safety. Today, after years of federal government supported drug trafficking and subsidy and loan programs, the moms in my old neighborhood probably feel the Popsicle Index is about 5%.

Mike Ruppert sometimes says to me, but the crime rate is dropping steadily. My response is that national averages have their place but they don't apply in specific cases. There are 63,000 neighborhoods in America and what counts is each one, one-by-one. Moreover, the Popsicle Index is not about statistics and it’s about a lot more than crime.

The Popsicle Index is about how people feel. Our feelings are real. Our feelings and our thoughts invent our world. Our feelings determine how we vote with our money in the marketplace or with our ballot at the polls. Crime may be down, but any mother or father knows it takes twenty years to raise a child and all it takes is one incident for a child to lose their life, their peace of mind or their soul. Moreover, even when reported crime is absent, the Popsicle Index can still be very low. A lot of kids can die from cars driving through a community too fast because the roads are poorly designed and people don’t care much about each other. The absence of evil does not ensure the presence of love. Conscious love is what must be present continuously to raise healthy and safe children.

Here some questions about the Popsicle Index for you. Let me know how you feel and we'll have a conversation.

How do We Organize Our Performance Around the Popsicle Index? - Every evening, the nightly news touts the performance of the Dow Jones index as a unifying indicator for how corporations are doing in the stock market. Our corporate wealth is only part of our wealth. We need a similar performance indicator to help us organize and focus our investment in our people and their 63,000 communities—our schools, our infrastructure, our small businesses and farms, our homes and community real estate and land.

How do We Vote for the Popsicle Index with Our Money? - In a healthy financial system, everyone in the system profits from helping the Popsicle Index go up and loses sales and investment when their actions - or the actions that they and their investors cause government to make - cause the Popsicle Index to go down. That is why we need to use our purchases, our media dollars, our bank deposits and our stock market investments like a vote and “vote with our money.”

How do We Determine How Our Money Works to Impact the Popsicle Index? - We can only manage what we can see. Democratic process and healthy markets require sunshine. Only roaches prefer the dark. An essential step to reengineering our investment around the Popsicle Index is community level financial disclosure. The citizens of 63,000 communities in America each need to share simple “maps” on how all the money and resources work in each one of our communities.

How Can We Profit When the Popsicle Index goes Up? - Right now the single biggest moneymaking opportunity in America is the profit potential on making the Popsicle Index go up. If we own homes, businesses and farms in a community with a low Popsicle Index and we figure out how to get it to go up, guess what will happen? A lot of people will make money. We will make money. What organized crime can destroy for a profit, we can rebuild for a profit if we can figure out how to generate sufficient profits to manage the expense of dealing with organized crime’s control and influence over our government, law enforcement and courts.

How Can We Get Out of Debt and Into Equity? - The primary source of financing large companies is equity capital. It comes from the stock market. The primary source of financing communities, including small businesses and homes, is debt. That means that communities - whether schools, infrastructure, small businesses, farms or homes and locally owned and controlled land - must pay far more to operate than corporations. It means that corporations can outgun communities in the political process, survive hard times, buy small businesses up cheap and attract our top talent. No neighborhood and no democracy consisting of about 63,000 neighborhoods can be healthy with this handicap.

How Can We Use the Popsicle Index for Slug Management? - I divide people into three categories: performers, followers and slugs. Performers are people who give more energy than they take. Followers are people who take as much energy as they give. Slugs are people who take more energy than they give. CIA drug traffickers are slugs. People who make money by rigging corporate profit with legislation that is bad for the taxpayers are slugs. Anyone can be a performer or a slug. We decide what kind of person we are. The problem with scapegoating and any non-performance based approach is that it creates barriers. The barriers prevent diverse performers - from different sexes, races, religions, technical and professional disciplines, and creeds from collaborating on effective "slug management." We need unifying high performance strategies that allow all Americans to collaborate in positive ways if we are to free ourselves from the slugs draining energy in our midst.

How To Make The Popsicle Index Go Up

A theme that will reoccur again and again over the coming months is one that Mike wrote about last month, and that is “The Pop.” What is The Pop? The Pop is the increased value of equity that stocks enjoy when they can be priced and traded in an open, liquid stock market.

Today, corporations take advantage of the Pop to get low cost equity capital. The inability of small businesses and farms, community infrastructure and residential real estate cooperatives to access and use The Pop is one of the most significant forces working against democracy - and the Popsicle Index. When access to equity capital is rigged for the benefit of the few by the legal system and supported by dirty tricks of law enforcement and intelligence agencies, the markets that depend on the “rule of law” and the “rule of performance” can and must eventually fail.

Catherine Austin Fitts is President of Solari, Inc. She is the former President of The Hamilton Securities Group, Assistant Secretary of Housing in the Bush Administration and Managing Director and member of the Board of Dillon, Read & Co. Inc. She can be reached at caf@solarivillage.com.

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