Jan 21, 2015, 3:08 PM ETFireside Chat, Product Demonstration

How the Poor Can Save Capitalism: Rebuilding the Path to the Middle Class

John Hope Bryant posits that the defining ethos of the 21st century is economics, not civil rights, with poverty rooted in "silver rights" (economic empowerment) rather than just political rights.
Bryant argues that poverty is not defined by money, but is a "disabling frame of mind" consisting of low self-esteem and a lack of confidence.
The solution to poverty is not aid, but providing the "memo" of financial literacy and access to the free enterprise system.
Bryant asserts that "being broke" is an economic state, whereas "being poor" is a psychological state of despair that must be actively rejected.

70% of all jobs in America are created by businesses with 500 employees or fewer.
There are 26 million companies in the U.S., but only 974 employ more than 10,000 people; 6 million employ one person or more, while the rest are tax shelters or merger vehicles.
In 2011, for the first time in history, the number of small business deaths exceeded the number of small business births (400,000 deaths vs. 350,000 births).
Bryant estimates that creating one million new startups per year would solve unemployment, GDP stagnation, and prosperity issues simultaneously.
Half of Americans earn $50,000 or less annually, yet 90% of those earning under $15,000 reinvest their entire income into the economy because they cannot afford to save.
Bryant challenges the narrative that America is in decline, noting the U.S. economy is still twice as large as China's even when accounting for state subsidization in China.

Bryant cites the Freedmen's Bureau Act of 1865 and the creation of the Freedmen's Bank as a historical precedent for using financial literacy to empower freed slaves, which was undermined after Lincoln's assassination.
He draws a parallel between the economic desperation that fueled the Arab Spring (Tunisia) and the 2005 Paris riots, arguing that both were driven by a lack of economic opportunity for marginalized suburban populations rather than purely religious or ideological extremism.
Bryant notes that the KKK's violence was orchestrated by business leaders (White Citizens Councils) to divert uneducated whites against blacks to protect their economic interests.
He argues that Dr. King's focus shifted from voting rights to economics because the 20th century's struggle was for democracy, while the 21st century's struggle is for economic security.

Bryant announced "Project 5117," a goal to deploy 1,000 "Hope Inside" locations by 2020 within bank branches, credit unions, and grocery stores.
These locations will offer HUD-approved mortgage counseling, EITC filing, and financial literacy training, effectively acting as a "national private banker for the poor."
The initiative aims to move 700,000 individuals' credit scores up by 120 points, transforming a 500 credit score into a 670, which qualifies them for mainstream banking services.
Bryant's organization has already facilitated $2 billion in private capital to underserved neighborhoods with a loan default rate of less than 3%.
The program includes "Hope Business in a Box" academies, offering free entrepreneurship training where students can pitch ideas for up to $500 in seed funding.
Bryant proposed a "B-minus business compact" where 500 CEOs commit to hiring students with B-minus grades for six-week paid internships, including providing suits and transportation.

Bryant advocates for making financial literacy a civil right, requiring K-12 and college curriculums to include mandatory courses on the rules of the free enterprise system.
He proposes issuing "financial literacy bonds" in target cities (e.g., Atlanta) to plug $300 million in annual economic leaks caused by defaulted property taxes and predatory financial services.
Bryant argues that the Affordable Care Act's impact on small businesses cannot be discussed from his current role as a presidential appointee.
He rejects the notion that homeownership caused the 2008 financial crisis, citing data that middle-income white males were the largest defaulters on subprime mortgages, blaming predatory lending and a lack of financial education instead.
Bryant asserts that negative amortization mortgages are not inherently bad for sophisticated high-net-worth investors but are predatory when sold to working-class individuals without understanding the risks.

Bryant believes the President is "behind the curve" on income inequality because he is focused on political fire-drills rather than the root "opportunity gap."
He argues that diversity is a business strength, citing New York and California as the two largest economies in the world due to their diversity.
Bryant criticizes the French "Black Bloc" protests for excluding immigrants, noting that such exclusionary solidarity damages the prospects of minorities in the suburbs.
He suggests that 85% of new business ideas will fail, but the process builds resilience and changes a person's mindset from "half empty" to "glass half full."
Bryant calls on the audience to donate $46.21 per month or a one-time $500 to sponsor a high school student for a business internship.
He maintains that America is the only country with every race in its borders and that freedom/self-determination is the primary driver of immigration and economic success.