The New York Times website unveiled a new blog this week dedicated to "Making the Most of Your Money." Bucks "aims to make managing your money simple again," according to writer Ron Lieber, who oversees this new venture for the NYT.
This is a crowded field, but it's good to see the NYT trying to compete in it (and great to see their flying piggybank logo, we know all too well how hard it is to come up with good visuals when talking about savings, wealth and personal finance), given their platform they could potentially reach a huge audience with helpful tips and advice. Lieber says:
"You can't be a full-time consumer, though. And that's why Bucks exists. We aim to be a lively source of shortcuts, short courses and mini-guides to the decisions you make with your money. It's a blog of tactics and takeaways...The lineup of regular features includes a daily roundup of the best consumer reporting from The Times. We'll also offer reviews of new products and services, from unique mutual funds to new savings accounts and Web services."
I've been arguing for awhile now that microcredit has been overly hyped, even dangerously so (i.e., credit will end poverty). But now media (see The Times, The Boston Globe, Foreign Policy, articles, for examples) are beginning a backlash against microcredit (likely caused in large part by failed expectations caused by said hype) that I nonetheless find equally, if not more, disturbing (i.e., microfinance isn't working). I've never thought of credit as a panacea, but I do believe financial inclusion and access to an array of asset building financial services are essential if the poor are ever to move out of poverty.
Two recent New America Foundation conferences considered the origins of the ongoing financial crisis and proposals for reforming the system.
On October 15, Senator Byron Dorgan of North Dakota discussed the requirements for financial sector reform at a conference co-hosted with the Washington Monthly. In a 1994 Washington Monthly cover story, "Very Risky Business", Senator Dorgan predicted with uncanny precision what actually happened in September 2008. Then, in 1999, Dorgan was one of eight senators to vote against the Gramm-Leach-Bliley Act, which repealed Depression-era banking regulation, cautioning at the time that deregulation "would raise the likelihood of future massive taxpayer bailouts." Now, as Chairman of the Democratic Policy Committee, Senator Dorgan supports sweeping reform of the financial sector.
Watch video of Senator Dorgan's remarks here.
Tuesday, October 20th I attended a summit pulled together by the National Disability Institute as part of their "Real Economic Impact Tour." The REI tour is "is a national, public/private initiative assisting low income persons with disabilities with asset building strategies, free tax preparation and filing assistance." Worthwhile stuff and very interesting, there's a lot of work to be done in the assets field for people with disabilities and special challenges faced because of some of the bureaucratic barriers created by programs serving those individuals.
Regardless, one of the presenters at the summit was from the Veteran's Administration (Sunil Gupta) and he began his remarks in Admiral Stockdale-like fashion, asking "Who Am I? Why is the VA here?"
Microcredit may have won a Nobel Prize, but evidence is mounting that savings-based programs are more effective tools for providing a pathway out of poverty.
In this week's New America/Politico Live Chat, Jamie M. Zimmerman, New America's deputy director of the Global Assets Project, will be taking questions at Noon ET Tuesday on the role of savings in international development, from the United States to Mexico to Uganda. For background on this issue and some promising pilot programs, please see the video from last week's event, "Savings as a Tool for International Development."
UPDATE: This online discussion has concluded. A complete transcript is available below..
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Previous New America/Politico chats have their full transcripts archived:
Jay Leno has mentioned it in his monologue.
Last week, both US News & World Report and Fox's Glenn Beck wrote about it.
In July, Next Gingrich penned an op-ed in favor of it.
In April, the Reverend Jim Wallis and former speechwriter to President George W. Bush, Michael Gerson, praised it.
And, all along, a bi-partisan group of Senators and Representatives, now led by Chuck Schumer, have been behind it. Even arch-conservative Rick Santorum, who Schumer worked hard to defeat, stood side-by-side with Schumer to introduce it in Congress a few years back.
The "it" is the ASPIRE Act, a lifelong savings and financial literacy account created at birth for every child in America. The bill allows the savings to be used for college, a first home, and retirement, and offers greater benefits to those most in need.
But why now, and from such an odd mix of people? Would it work? And would the Obama Administration get behind it?
My colleague Anne Stuhldreher has a nice piece in the online Sacramento Bee this week, arguing that California Governor Arnold Schwarzenegger should follow in the footsteps of New York City Mayor Michael Bloomberg by adopting an updated poverty measure in his jurisdiction. Now this all seems ripe for a "Twins" joke, but I'll largely refrain.
Anne nails the case for ditching the old poverty measure: it's inflexible, doesn't represent the way people live today, takes no account of vast differences in cost-of-living by region, ignores the impact of state- and federal-efforts and leads to bad policy. I think it's best stated here:
A number-cruncher by trade, Bloomberg turned to statistics to shed light on those suffering in the economic gloom. "If you can't measure it, you can't manage it," he was quoted as saying. His questions were basic: What people and places in New York have the greatest need? How could the city best deploy its limited public dollars to meet them? And what impact were its current programs having? But the federal poverty stats couldn't provide answers. The mayor found them useless...How can you target limited funds when you can't distinguish who needs them most?
"Investing in those who invest in themselves" First-of-its-kind asset building pilot launched in Nigeria
By Jamie Zimmerman & Shweta Banerjee
Notoriously resource-rich, poverty-stricken and conflict-prone, the Niger Delta region has always been viewed among the unlikeliest places for reform, particularly one that "spreads the wealth." But this week we are proud to announce that the Bayelsa State Government (BYSG) located in the delta region of Nigeria will launch of a policy pilot that provides matched savings accounts to children and youth throughout the state's eight districts. This initiative is not only the first government-supported anti-poverty intervention in the Niger Delta region, but the first state-wide CDA policy pilot in the developing world.
What goes up, as the saying goes, must come down, and for all the splash that the microcredit movement has made in the past decade, it seems that the belief that small loans will provide a pathway out of poverty is revealing some fissures.
A recent Times of London article (World poverty guru "fails" to spread wealth) brought attention to the questions surrounding the movement to which Muhammad Yunus helped to bring awareness. The article cited a recent study conducted by Dean Karlan and Jonathan Zinman in the Philippines, where they discovered that microcredit recipients did not fare better than those not receiving loans.
That's not to say that the advent of microlending has not been a vital and necessary innovation. But it isn't a panacea, and more voices have arisen to ask: what about providing the poor the financial services to which they so often lack access; most notably, a safe place to deposit and save their money?
Last week, New America's children's savings account proposal, the ASPIRE Act (America Saving for Personal Investment, Retirement, and Education Act) received some major recognition from the mainstream media on the US News and World Report website. They ran an entire piece on the ASPIRE Act which focused on many of the details behind the proposal. The author of the article was also interviewed by ABC news. The reactions have been mixed, but the proposal is getting a lot of attention and hopefully some serious policy debate will result.
The ASPIRE Act would automatically provide every child in United States with a savings account when they receive their social security number. Every account would be endowed with a one-time $500 contribution and children from lower-income families would be eligible for a supplemental contribution of up to $500. Earnings in the accounts would be allowed to grow tax-free and lower-income Americans would be eligible for matching contributions. The accounts would also be used to help promote financial literacy.