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May 29 2014

The American nightmare? Bridging economic inequality in the U.S.

The American nightmare? Bridging economic inequality in the U.S.

By Mohanad Hage Ali | Special to Al Arabiya News
Thursday, 29 May 2014

Economic debates have raged on since the debilitating credit crunch hit the United States and a new book entitled “How the Poor Can Save Capitalism” adds new insight to the mix.

Penned by John Hope Bryant, an African-American, the book discusses the means to solve poverty in the country, which the author says is more of a taboo than discussing race.

The book is not a strong condemnation of neoliberalism, as some other discussions of the economic meltdown have been. Like Joseph Stiglitz’s Price of Inequality and Thomas Pickety’s Capital in the 21st Century, it is not about analyzing the reasons behind the rise of inequality in America.

Instead, it is a macro self-help bo

ok, providing Keynesian solutions too those in need. The “prophetic” book is acceptable to mainstream American politics, and carries more weight as soon as one learns that the author serves on the U.S. President’s Advisory Council on Financial Capability.

For Hope, the results of poverty are what cause self-perpetuating poverty; the first is self-esteem and the second is the lack of a positive role model, of opportunity in education, relationship wealth, and finally access to capital. Basically, if you are a poor person, among America’s 16 percent, you and your family could be locked in this self-perpetuating cycle.

Bryant, whose role model is Martin Luther King, believes that financial literacy is “the new Civil Rights issue for a generation,”and recommends policies to encourage small businesses and teach financial literacy.

Born in 1966 and raised in poverty-stricken, gang-infested South Central Los Angeles, Bryant saw firsthand how our institutions have abandoned the poor, according to the blurb of his new book. He details how business loans, home loans, and financial investments have vanished from their communities meaning the poor lack bank accounts, decent credit scores.

Stiglitz, and Pickety, both established economists, have tackled the issue of inequality as it stands today. Stiglitz shows how a small minority maintains a great deal of power in the United Statutes, pursuing their interests on the expense of the majority of the population. Pickety highlights the significance of family dynasties in the world’s richest class, implying the perpetuation of concentrated wealth.

Poverty and inequality are a worldwide epidemic. An estimated 22 thousand children are dying daily because of poverty while three billion people live under $2.5 a day and 80 percent of the world’s population live under $10 a day. On the other hand, the 85 richest people in the world own as much as the 3.5 billion poorest combined.

Although the economy debate has raged on in the Western world, will the Middle East region see a rise in such discussion? The high rate of youth unemployment in the region has led to anger and even played a part in sparking the so-called Arab Spring protests. It is estimated that the region must create 75 million jobs if it is to harness its young people’s potential, according to Miroslav Dusek and Hala Hanna of the World Economic Forum.