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Why not just give people money?

DCblogger's picture

Can 4 Economists Build the Most Economically Efficient Charity Ever?

GiveDirectly, the brainchild of four Harvard and MIT graduate students, is so simple, it's genius. Give poor Kenyan families $1,000 -- and let them do whatever they want with it.

Brilliant. People know what they need. This eliminates bureaucracy, paper work, all manner of aggravation. And the money goes right into the local economy, so there is a multiplier effect. Brilliant. More like this please.

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Submitted by cg.eye on

That was the last miracle solution for third-world poverty... until the rentiers stepped in:

But the phenomenon has grown so popular that some of its biggest proponents are now wringing their hands over the direction it has taken. Drawn by the prospect of hefty profits from even the smallest of loans, a raft of banks and financial institutions now dominate the field, with some charging interest rates of 100 percent or more.

“We created microcredit to fight the loan sharks; we didn’t create microcredit to encourage new loan sharks,” Mr. Yunus recently said at a gathering of financial officials at the United Nations. “Microcredit should be seen as an opportunity to help people get out of poverty in a business way, but not as an opportunity to make money out of poor people.”

And I bet those fine business school folk wouldn't let the mission of this new group be distorted... that is, until their recruitment to the firms of their choice takes place.

Rainbow Girl's picture
Submitted by Rainbow Girl on

All you have to do is look at the roster of the "Management Team" and board members of a micro-lending shop like Accion, one of the heavy-weights in the mass debt-enslavement of third-world people under the banner of a Non-Profit Organization doing St. Teresa's work by creating financial indebtedness.  Examples:

(1) President & CEO (Rubin's boy at Clinton Treasury and then at the post-gov Citibank payoff job).

(2) Chair of the Board of Directors (Diana Taylor, Michael Bloomberg's "girlfriend/roommate," Board Member at Brookfield Properties of Zuccotti Park fame and Board Member of Sotheby's who when the art handlers were striking to protest proposed wage and benefit cuts while the Execs were getting massive raises told the Board that if Sotheby's would negotiate with the arthandlers she would quit the Board.)

It really is all very Obama-esque, what with the Non-Profit Help The Third World shingle housing a predatory finance scam aimed at the most vulnerable of all people.  (Sort of like the way Obama called himself a "community organizer" when he was part of the very lucrative, tax-funded Low-Income Housing Finance Scam in Chicago.)

Rainbow Girl's picture
Submitted by Rainbow Girl on

Are you being sarcastic? 

If not, the type of "affordable housing programs" that Valerie Jarrett was in charge of in Chicago (this was, I believe, Obama's community organizing "territory") are built on the Federal Low Income Housing Credits program (pretty much the last Fed money available to build affordable housing).  There is a "niche" industry in this area of the taxpayer funded economy that involves politically connected "community groups" who get huge "developer's fees" and then manage the affordable housing project (with continuing, often, funds directly paid by Fed Gov for post-construction "management" costs); private equity firms; whatever local "housing authority" is "sponsoring" the specific project, etc.  Very short version: all parties involved do very nicely.  This is, incidentally, the area that has given rise to the "real estate Reverends", referring to politically-connected community leaders who tend to be repeat players in whatever City the LIHC projects are being built.

nihil obstet's picture
Submitted by nihil obstet on

I firmly believe that people should be provided a minimum income.  Over time, they will learn how to handle the money and how to prioritize needs and desires.  However, if this is a one-shot deal, it does have problems.  Remember that "bureaucracy, paper work, all manner of aggravation" isalso means regulation and safeguards.  If people know what they need and can efficiently use the money to get it, we wouldn't have any problems with predatory lending, or failure to prioritize healthcare spending as necessary, or any of the other myriad problems that we have.  And this is before you figure in abuses such as one family member (usually a young male) taking all the money for his own use.  Abuse of women and children is a serious problem.


Granted that aid organizations and workers can be patronizing and insulting, their requirements are usually there for good reason, and their advice would frequently keep their clients from being ripped off.


Rainbow Girl's picture
Submitted by Rainbow Girl on

Exemplified by Mayor Michael Bloomberg.  People were so excited that New York would have a mayor who was Too Rich To Bribe.  It never occurred to them that it takes two to make a bribe -- they forgot about the briber.  And so Mike spent 12 years putting every elected official and community organizer in his pocket.  And made New York City into a model of a Third Way kleptrocracy utopia!