Muhammad Yunus courtesy U2005

I was over at Cocktailhag’s blog and this bit got me started thinking:

I’m beginning to feel some trepidation regarding the bailout, which now seems certain to pass in some form. What little of it is destined to be spent on anything useful, i.e., infrastructure, is going to be dedicated, in large part, to ”shovel-ready” projects, which might be more accurately called deferred maintenance, when something much more revolutionary is clearly in order.

As Cocktailhag notes, very little of the bailout money is going for anything useful. That "non-useful" money, in large part, is going to the multinational corporations and huge investment firms who are directly responsible for the economic meltdown in the first place. How on earth is giving these modern day robber barons more money going to be expected to benefit the average citizen?

A huge aspect of the economic crisis is the daily onslaught of layoffs. I don’t see how any of the bailout proposals put forward to date deal with that. Taken to its extreme, one could say that our economy is now in a downward spiral toward that of a third world nation.

Fortunately, there is a tremendous example of how to address economic development in the third world. The 2006 Nobel Peace Prize was awarded to Muhammad Yunus for his revolutionary microcredit concept which he prefers to call Grameencredit. Here are just a few characteristics of Grameencredit, and in looking them up, I was struck by how applicable they are to the current crisis in the US:

a) It promotes credit as a human right.

b) Its mission is to help the poor families to help themselves to overcome poverty. It is targeted to the poor, particularly poor women.
/snip/
d) It is offered for creating self-employment for income-generating activities and housing for the poor, as opposed to consumption.

e) It was initiated as a challenge to the conventional banking which rejected the poor by classifying them to be "not creditworthy". As a result it rejected the basic methodology of the conventional banking and created its own methodology.

Here is a further elaboration of the concept, and, again it is spot-on for the problem in the US:

Grameencredit is based on the premise that the poor have skills which remain unutilised or under-utilised. It is definitely not the lack of skills which make poor people poor. Grameen believes that the poverty is not created by the poor, it is created by the institutions and policies which surround them. In order to eliminate poverty all we need to do is to make appropriate changes in the institutions and policies, and/or create new ones…

So, how could these concepts be applied in the US? Here are my thoughts on a structure that I think could work:

–Multiple local cooperatives distributing Grameencredit as described by Yunus.

–Establishment of "commerce centers", either in converted existing buildings or construction of dedicated facilities, where entrepreneurs lease time by the hour, day, week or month for access to facilities such as industrial kitchens, machine shops, electronics shops, auto repair bays, sewing equipment, etc.

–Expansion of farmer’s markets to neighborhood markets where wares produced can be sold locally.

The bonus of this approach is that in allowing people to put their skills back to work providing for their families, it also begins the process of restoring a sense of community. Strong, local production of goods can begin to compete with the multinational firms if the local bazaar reaches a critical mass where shopping there carries more appeal than going to the Super Wal-Mart. With the elimination of much of the logistics and transportation costs of the multinationals, the model could even move toward competitive pricing.

This approach is entirely sustainable. Grameencredit is characterized by an incredibly high success rate of repayment. Likewise, I think the "commerce center" approach also will pay for itself when a critical mass of clients joins in. The beauty, and the savings for the average person, is that this system doesn’t include the layer of robber barons who skim off their huge profits at the expense of the workers and consumers. Let’s take advantage of the current situation to apply a reverse "shock doctrine" and exclude them from our new economy. Who needs them anyway?

I’d love to hear your thoughts on this proposal or other approaches to getting our economy working again.