An alternative solution: Elephant Pooh

            During a trip to Sri Lanka, Dr. Karl Wald of Brooklyn, discovered a heart-wrenching problem. Thousands of the elephants were being killed, not for meat or their valuable ivory tusks but simply because of the economic devastation they caused to local farmers, with their tremendous appetites.  The elephants can destroy all of a farmer’s crops in one night, making it impossible for them to coexist in areas where farming is the major source of industry, according to MrElliePooh.com (here).  In order to save the elephants, Wald could have formed an enormously costly non-profit organization reliant on donations and the support of local governments. He could have lobbied the international community to put tax a random unrelated industry to fund the organization. But he didn’t. He had a better, more sustainable idea—give economic value to the elephants, which gives locals a reason to save the animals, creates new industry in the area and provides jobs in the United States.  How? It turns out elephants are actually miniature paper processing factories. The 500 pounds of feces they produce from their vegetarian diet is almost entirely cellulose, according to the site, which can be converted into paper products. The locals are paid a fair wage to collect the waste, allowing them to still get value from their damaged crops. 

            As I mention in my previous post, disease is linked to poverty. In an article on NPR’s website, “AIDS, Other Diseases Create Poverty Trap in Africa” (here), reporter Jason Beaubien details the problem, in which the most educated and productive members of families fall ill, cannot afford healthcare and can no longer care for their families. He writes “People get sick because they're poor. And they get poorer because they're sick. A man can't afford health care, his condition worsens until he can't work, and soon his entire family is malnourished as a result of his illness.” The problem is a cyclical one. In order to break the cycle, we do need to ensure funding to certain initiatives by the Global Fund to Fight AIDS, TB and Malaria. But that is a topic for another blog.

            What we can  do through financial reform, or rather economic and trade reform is attempt to break the cycle of poverty in these countries through creating industry in these affected regions. And we have great incentive to do so. The spirit of Dodd-Frank was to prevent government bail-outs of large systemically important institutions but it did not nor was it intended to create jobs in the United States. Africa is often referred to as the most resource rich continent on earth in terms of natural resources.  But it has another great resource—consumers who are dying in masses because they do not have the means to consume. If we are to solve the unemployment problems in our own country, a partnership with emerging nations in Africa and elsewhere could provide the pathway to success.

Critics could argue that during a time in a time of high domestic unemployment, we need to focus on creating jobs in the United States. Others might argue that I am promoting a new form of colonialism.   I suggest neither. Wald works and provides jobs in the United States. Mr. Ellie Pooh is not a non-profit organization hemorrhaging money. It is a business model that is mutually beneficial to the United States and locals in that region of Sri Lanka.  Neither suffers any economic lose, only gain. So the solution I suggest is not to tax a market such as the currency market, which needs to remain liquid for the very sake of these countries.

            Rather, the United States government needs to provide low interest loans and major tax incentives to entrepreneurs who can come up with a business model that provides jobs both domestically and in an impoverished region of the world.

            This accomplishes several objectives, particularly if the incentives are aimed heavily at major U.S. universities and colleges or recent graduates, the demographics most likely to take on such a risk. First, it creates U.S. jobs. Second, it gives foreign (should-be) consumers spending power to protect the health of their breadwinners. If we are particularly successful, we will develop a consumer base who would buy our healthcare products and ideally, one day our Chevys. Third, it could help balance the supply-demand curve for jobs in the U.S.. Unemployment in November is up to 9.8%, with more than 100,000 people entering the job market per month. Let’s ship some of those first-timers out to do what they will with some American capitalism and entrepreneurial spirit and leave the domestic jobs with those with families. And it won’t cost taxpayers anything. Any job created in the U.S. will be a bonus and even if these start-up companies pay the most minimal taxes, it is revenue we wouldn’t have had otherwise, while taking the burden off of the unemployment system. The interest from these U.S. loans could either be funneled into an expansion of the program or directly into building the infrastructure of these countries or fixing closing our budget deficits. 

            Why focus on impoverished economies? Besides the moral reasons of developing the means to afford healthcare, there is such a huge potential when giving people the means to buy stuff they need. We will get a huge bang for our buck bringing people up to reasonable living standards.  All the better for our own exports if we can provide them what they need. Can’t forget about that huge U.S. trade deficit. So where do we look for such investment opportunities? Interestingly enough, there are a lot elephants in Zimbabwe, my example from the previous post. And for the Global Fund’s $8 billion funding deficit? Scrap Dodd-Frank and use the money we were going to blow on implementing the act. Let’s start taking some real action.