A Better Plan to Save Capitalism

JOhn Hope BryantThere’s been a lot of discussion about the C word lately: capitalism. The Pope made news by saying that the capitalist economic system “is centered on money, not [on the] human person…. It is an inhumane economic system.”
Meanwhile, French economist Thomas Piketty, author of Capital in the Twenty-First Century, argues that capitalism, as currently constructed, is rigged for the rich and against the poor, eventually creating a world that resembles 19th-century Europe.
The dialog has once again descended into a debate over whether income inequality actually exists, or is a problem, or who’s to blame, or what role ? if any ? government and private industry can play, and more importantly, what choices individuals have to correct the situation in their own lives.
The Poor Can Save Capitalism

There’s another, more pragmatic, way to view capitalism, which fully embraces the power of capitalism to transform lives, while simultaneously appealing to the great American tradition of compassion and common connection.

The poor can save capitalism, a completely counter-intuitive idea to many.

The root of this idea is a simple truth: that when we all prosper, we all prosper more. By including those so often excluded ? the poor and the shrinking middle class ? we can re-energize our stalled economy for everyone, the rich included.

There are countless examples showing that when struggling people have the necessary tools, policies, and inspiration, they will rebuild the middle class, and become a new generation of consumers, entrepreneurs, and leaders.

Even many hard-nosed capitalists are coming to understand this dynamic and recognize the disastrous effects of excluding such a vast portion of the population from the financial and economic system of America. At the 2013 Global Dignity Summit, Governor Pawlenty, the Chairman of the Financial Roundtable, said unequivocally, “We’ve got to do this as a team. It is not going to work going forward economically, culturally, socially having fifteen to thirty percent of our population disconnected from the economy, primarily due to a lack of access to skills and education.”

The HOPE Plan to Eradicate Poverty

The HOPE plan is a nonpartisan plan to address income inequality and create financial dignity and inclusion through concrete, pragmatic actions. The HOPE plan is already in motion, has been endorsed by leaders of both parties, and has been compared in scope and moral authority to the Marshall Plan.

The plan sets forth a comprehensive, practical agenda: invest in hope through small business development and financial literacy training and counseling; increase inclusion in the banking system; nurture hope by improving credit scores; and encourage entrepreneurship starting with schoolchildren and teens.

The HOPE plan features a comprehensive program called Project 5-1-1-7, which calls for:

— Teaching 5 million youth the language of money and financial consciousness in thousands of American schools

–? Creating one million future entrepreneurs through programs like Business in a Box, a kind of “shark tank for kids” program that gives grants of $50-500 for micro-startups

–? Establishing 1,000 financial empowerment centers located in local bank branches, and boosting credit scores to a bankable level of 700.

Focusing on Solutions, Not Problems

Unlike Piketty, the focus of the HOPE Plan is on answers, not questions, solutions, not arguments, decisions, not debates. The work demonstrates the power of smart business and responsible capitalism to convert renters into homeowners, check cashing customers into bank customers, minimum wage workers into living wage workers, and small business dreamers into small business leaders.

The HOPE Plan approach takes an unabashedly pro-business, pro-growth agenda, which starts with increasing the financial skill of know-how of a growing segment of the population that does not understand the basics of how money and business work. Many believe that this basic lack of financial consciousness in fact exacerbated the recent economic crisis and continues to curtail a full recovery.

Instead of considering the struggling segments of the population as a constraint on economic growth, marginalized as “takers,” there is already a plan in place to find solutions for the 100 percent, for rebuilding the path to the great American middle class, and strengthening the foundation of the entire economy.
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John Hope Bryant was appointed by President Obama to serve on the President’s Advisory Council on Financial Capability for Young Americans, and was Chairman of the Subcommittee on the Underserved and Community Empowerment during the George W. Bush presidency. He is also founder, chairman, and CEO of Operation HOPE, a nonprofit banker for the working poor, the underserved, and the struggling middle class, which provides financial literacy for youth, financial capability for communities, and ultimately, financial dignity for all. His forthcoming book, How the Poor Can Save Capitalism: Rebuilding the Path to the Middle Class (Berrett-Koehler, June 2014), has been endorsed by leaders and thinkers of both parties.