How the Poor Can Save Capitalism

1. Capitalism Can Work for All, Not Just the Few

And no one has ever tried to make free enterprise and capitalism work for the poor and others left out and left behind in America, at scale.

Reimagining Capitalism. The current system often leaves the poor and underserved behind, but capitalism, at its core, is not inherently flawed. The problem lies in how it's implemented, often excluding those who could benefit most. The author argues that free enterprise can be a powerful tool for lifting people out of poverty if it's intentionally designed to include everyone.

Consumer-Driven Economy. The U.S. economy is largely driven by consumer spending, with the bottom 80% of consumers spending the vast majority of their income. This means that the economic health of the nation depends on the financial well-being of ordinary people, not just the wealthy. When the poor and working class struggle, the entire economy suffers.

Untapped Potential. The poor are not a burden but an untapped resource. By investing in their financial literacy and providing them with opportunities, we can unlock their economic potential and create a more prosperous society for all. This is not just about charity; it's about creating a more robust and sustainable economy.

2. Poverty is More Than Just a Number

The HOPE Doctrine on Poverty says that there are three things that define poverty and struggle more than any set of financial numbers ever could: self-confidence, self-esteem, and belief in oneself; role models and environment; aspiration and opportunity.

Beyond Statistics. Traditional definitions of poverty, based solely on income levels, fail to capture the full picture. The author argues that poverty is also defined by a lack of self-confidence, positive role models, and opportunities for advancement. These non-financial factors are just as important as income in determining a person's ability to escape poverty.

The Teetering Class. Many Americans, including those in the middle class, live with a constant sense of financial insecurity. This "teetering class" is characterized by a lack of stability, stress, and worry about the future. They may not be officially classified as poor, but they experience many of the same challenges and anxieties.

Culture of Poverty. Poverty is not just an economic condition; it's also a culture. When people are surrounded by negative role models and limited opportunities, they often lose hope and become trapped in a cycle of poverty. Breaking this cycle requires addressing the underlying psychological and social factors that contribute to it.

3. Financial Literacy is the New Civil Right

Access to finance and financial literacy is a new civil rights issue.

The Language of Money. Financial literacy is the ability to understand and use financial concepts effectively. It's a crucial skill for navigating the modern world, yet many people, especially those in low-income communities, lack this basic knowledge. Without financial literacy, people are vulnerable to exploitation and unable to build wealth.

Self-Determination. In today's world, freedom is not just about political rights; it's also about economic self-determination. Access to capital and the knowledge of how to use it are essential for people to control their own lives and achieve their full potential. Financial literacy is the key to unlocking this economic freedom.

A New Civil Rights Movement. The author argues that ensuring financial literacy and economic opportunity for all is the new civil rights issue of our time. Just as the civil rights movement fought for political equality, we must now fight for economic equality by empowering people with the knowledge and tools they need to succeed.

4. Banking Should Serve Communities, Not Exploit Them

The poor and the underserved have never gotten a memo, a manual, or any education in free enterprise and responsible capitalism.

Banking's Original Purpose. Many of today's largest banks were originally founded to serve the working class and immigrant communities. However, over time, many banks have shifted their focus to serving wealthier clients, leaving the poor and underserved with limited access to mainstream financial services.

Predatory Lending. The alternative financial services industry, including payday lenders and check-cashing services, often exploits the financial vulnerability of low-income communities. These businesses charge exorbitant fees and interest rates, trapping people in a cycle of debt.

Ethical Banking. The author calls for a return to ethical banking practices that prioritize the needs of the community over short-term profits. This includes providing affordable banking services, financial literacy education, and access to credit for those who need it most. Banks can do well by doing good.

5. Homeownership is a Family's Hedge Fund

Real estate has always been the working family’s hedge fund— a hedge against being dead broke at the end of a life of hard work.

A Path to Stability. Homeownership has historically been a key way for working families to build wealth and achieve financial stability. It provides a sense of security, a place to raise a family, and an asset that can be passed down to future generations.

The Subprime Crisis. The subprime mortgage crisis devastated many families, particularly those in low-income communities. Irresponsible lending practices and predatory mortgages stripped people of their homes and their savings, highlighting the need for responsible lending and financial education.

Dignity Mortgages. The author proposes a new type of mortgage, called a "dignity mortgage," that would be designed to be more accessible and affordable for low-income families. These mortgages would be coupled with financial literacy education and counseling to ensure that borrowers are able to manage their payments responsibly.

6. Credit Scores Can Transform Communities

When a person moves his or her credit score from 550 (on average) to 670 or more, everything in that person’s life changes.

More Than Just a Number. A credit score is not just a number; it's a reflection of a person's financial health and responsibility. A low credit score can limit access to credit, housing, and even employment opportunities. Improving credit scores is essential for empowering individuals and communities.

500 Credit Score Communities. Many low-income communities are characterized by low credit scores, which contribute to a cycle of poverty and limited opportunity. These "500 credit score communities" are often targeted by predatory lenders and lack access to mainstream financial services.

700 Credit Score Communities. The author envisions a future where communities are transformed by improved credit scores. By providing financial literacy education and credit counseling, we can help people raise their credit scores and gain access to better financial opportunities. This will lead to more stable communities and a more prosperous society.

7. Entrepreneurship is the Key to Job Creation

We need a massive nationwide focus on entrepreneurship and small business creation, and a focus on the active development of what I call self-employment projects.

Small Businesses, Big Impact. Small businesses are the backbone of the American economy, creating the majority of new jobs. By fostering entrepreneurship, we can create more opportunities for people to become self-sufficient and contribute to their communities.

Untapped Potential. Many people in low-income communities have the skills and drive to become successful entrepreneurs, but they lack the resources and support they need. By providing access to capital, mentorship, and training, we can unlock their potential and create a new generation of job creators.

Beyond Traditional Jobs. The author argues that we need to move beyond the traditional model of employment and embrace self-employment and entrepreneurship as viable paths to economic success. This requires a shift in mindset and a commitment to supporting those who want to create their own opportunities.

8. Role Models and Mentors are Essential

All of us are who we are because of our role models.

The Power of Example. People are influenced by the role models they see around them. When young people lack positive role models, they are more likely to be drawn to negative influences. Providing access to mentors and role models is essential for inspiring hope and creating a culture of success.

Business Role Models. The author emphasizes the importance of business role models, particularly for young people in low-income communities. By seeing successful entrepreneurs and business leaders, they can begin to imagine a different future for themselves.

Mentorship Programs. Mentorship programs can provide young people with the guidance and support they need to achieve their goals. By connecting them with successful adults who can share their experiences and offer advice, we can help them navigate the challenges of life and career.

9. The HOPE Plan: A Blueprint for Change

This HOPE Plan is a big idea that seeks not merely to include the poor, to be moral and kind, or to placate the ever-growing struggling middle class. It is a bold plan to fuse the huddled masses with the future success of this nation.

A Modern Marshall Plan. The author proposes a "HOPE Plan" for America, modeled after the Marshall Plan that helped rebuild Europe after World War II. This plan would focus on investing in financial literacy, access to banking, homeownership, and entrepreneurship, with the goal of creating a more inclusive and prosperous society.

Practical Solutions. The HOPE Plan includes a range of practical solutions that can be implemented at the local, state, and federal levels. These solutions are designed to address the root causes of poverty and create sustainable pathways to economic opportunity.

A Call to Action. The HOPE Plan is not just a set of policy proposals; it's a call to action for all Americans to get involved in the fight against poverty. It requires a commitment from government, businesses, communities, and individuals to work together to create a more just and equitable society.

10. Project 5117: A Practical Path Forward

Project 5117 is about changing and transforming an entire generation, empowering future leaders for America, and stabilizing and rooting this generation of working poor, working-class, and middle-class communities.

A Four-Pronged Approach. Project 5117 is Operation HOPE's comprehensive plan for combating economic inequality. It focuses on four key areas: financial literacy education, entrepreneurship training, access to banking, and credit score improvement.

Five Million Kids. The project aims to empower five million young people with financial literacy education, using celebrity endorsements to make learning about money cool and engaging. This will be the foundation for a new generation of financially responsible citizens.

One Million Entrepreneurs. Project 5117 will also help one million young people become entrepreneurs and job creators through HOPE Business in a Box academies. These academies will provide training, mentorship, and access to capital, empowering youth to start their own businesses.

Banking and Credit Access. The project will establish one thousand bottom-up branch banks and five thousand certified locations to provide access to banking and credit for low-income communities. This will help people build wealth and escape the cycle of poverty.

Last updated: January 26, 2025