Friday, May 8, 2009


If you know about aid and development, you know that one of the big success stories is microfinance, giving small loans to poor people so they can start businesses.  One of the leaders is this field is the Grameen bank.  One thing I didn't know is that Grameen has a branch in the USA.  And it is doing quite well.  Almost all of the loans are being repaid, even with the current crisis.  And most importantly, most of the people they lend to have better lives as a result of their loans, because they were financing investment rather than consumption.

Economists know that one of the most important functions of capital markets is to provide finance to businesses so they can start and grow.  This is one of the fundamental engines of economic growth.  It is a powerful indictment of our current financial system, indeed our entire society, that it has failed in this basic task.  Our business and governmetn leaders corrupted the primary purpose of finance, pushing all kinds of worthless loans and accounting shenanigans that brought the entire world to the brink of disaster.  Meanwhile, an aid program designed to help people in Third World is doing the job, in our country, that capitalists should have been doing, and making a profit while doing it.

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