| Fifty years after Lyndon Johnson first declared it, the American war on poverty seems to be dominated by two extremes. On one side are those who see the war as a success because public spending has led to the poor having relatively decent living conditions. What we need, they would say, is much more federal spending. Which, even if it were a good idea (it’s not), wouldn’t stand a snowball’s chance in an ISIS compound of getting through Congress. On the other side is the private sector, which has set up a thriving payday lending industry that is quick to tout its ability to loan poor people just enough to make it to their next meager paycheck. If they can’t repay the loan at interest rates of 500 percent or more, they can always borrow more. Surely, there must be a third way. Of course there is. |
| | LBJ’s crusade is a hot topic again because the U.S. Census Bureau has released its yearly poverty report. It concludes that 14.5 percent of the country is poor, which is about the same as in 1967. Of course, that’s hardly the final word on the matter. The figures don’t count government assistance, which keeps a lot of folks from destitution but hardly keeps them from being poor. It’s good fodder for debates, but there is no denying that, despite about $22 trillion in federal money, LBJ’s aim of turning the poor into self-sustaining, taxpaying citizens has failed. Just as there is no denying that payday lenders thrive because they know many of the nation’s poor lack the training to understand how devastating a small, high-interest loan can be. Which brings me again to Muhammad Yunus, who has been in the news again lately. Yunus, winner of the Nobel Peace Prize in 2006, should be a familiar figure to Utahns, not only because of his frequent visits here, but because of his efforts to help the poor by putting them in touch with their inner entrepreneurial selves. Yunus pioneered the notion of micro-credit by establishing a bank in Bangladesh that provides small loans of perhaps $5 to $20 to impoverished people so they can begin small businesses. His program uses support groups to provide encouragement and help. He is in New York City right now, serving as a judge to select the best sustainable business idea for helping the poor, as developed by college students. As I noted after his last visit to Utah, Yunus has added to his microcredit legacy by developing many such businesses on his own in his home country, providing the nutrition necessary to end night blindness, providing electricity to remote villages and offering cell phones even the poorest can afford. Most poor people in this country don’t face the kind of poverty found in Bangladesh, but it’s worth noting that Yunus’ Grameen Bank now has seven branches in the United States. He recently told NPR the bank serves 25,000 customers in New York City alone, all of them women. As you might expect, a microloan in the United States is a bit larger than in Bangladesh. The average New York loan is $1,500. Yunus isn’t the only one with a unique idea to help the poor. A group called Circles USA has as its goal to set up informal networks that bring the “motivated” poor, as one supporter calls it, into a circle of friends that include successful people and support organizations. Nick Cotter, who is working to start such a group in Knoxville, told the Pittsburgh Post-Gazette, “If poor people interact with more well-off people, those people know people.” It’s a way to teach the poor the things successful people know. Will these ideas work? There are endless debates about that, just as with everything else having to do with poverty. But 50 years and stacks of money haven’t gotten us very far, and I doubt anyone can keep a straight face and say payday lenders are getting the job done, either. Yunus told NPR, “My position is that all people are smart people.” That’s a bold, but empowering, statement. Why not do more to encourage programs that test that theory? |
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