Livemint Not so long ago, the US Federal Reserve reported that 70% of all Americans were living from paycheque to paycheque, yet approximately 70% of America’s economic prosperity sits on the back of the US consumer.

If nothing else has made it clear that we are all connected, the now global impact of the subprime mortgage crisis should. In this fast growing and morphing subprime mortgage crisis, which has now become a general credit crisis, a liquidity crisis, and ultimately a crisis of confidence, an investment made to homeowners in Florida cripples the budget and causes a slash of government services for a small town in Norway that invested in mortgages.
When you set aside predatory lending, fraud, speculation and simple greed, at the core of this now global financial crisis is the massive level of consumer financial illiteracy. Not so long ago, the US Federal Reserve reported that 70% of all Americans were living from paycheque to paycheque, yet approximately 70% of America’s economic prosperity sits on the back of the US consumer.
From South Central to the south of France to southern India to South Africa, the impact of not endowing our young people with what I call the “language of money”, or financial literacy, and with it an understanding of free enterprise and how capitalism works (and can work for them) is apparent, and the results are not good.
In schools from Los Angeles to New York City, in the US, dropout rate among all young people is alarming at 30%, but increases exponentially for young people in urban communities, hovering between 50% and 70% — young people who, unfortunately, don’t see education as relevant to their futures. The best way to make education relevant to youth is to show them how to get rich responsibly and legally.
There simply is not enough police in the world capable of controlling a large portion of any population that has convinced itself that the system doesn’t work for them, no matter how hard they work or try. New Orleans, Louisiana, has approximately one police officer for every 350 or so residents, compared with Los Angeles, California, with no more than one police officer for every 700 or so residents. In this example, one should be able to conclude and assume that New Orleans would be approximately twice as safe as Los Angeles, but such a thing is very far from the truth.
In fact, the truth is almost wholly an inverse of this model assumption. New Orleans is far more dangerous a place to visit (for tourists), walk the streets, shop, or live than Los Angeles. Why you ask? It’s the HOPE factor, that’s why.
If you look at Rwanda and South Africa, these democracies have gone from genocide and apartheid to relative peace and prosperity in less than 15 years. The challenge in both places is very simply the same. “How do we move a level of individual prosperity for people at all levels, as soon as humanly possible without engaging in a wholesale give-away programme (which, by the way, never works in the long term. People want dignity and self-reliance too).
How do we do this? At Operation HOPE it starts with giving individuals the tools to understand self-sufficiency and choices. It starts with financial literacy.
No community survives without hope. And in a capitalist society and a system of free enterprise, financial literacy and a basic understanding of the language of money is the very first “silver right”.
I want to empower people with a hand up, and not simply a hand out. I see a new generation of dignified young African, Asian, Indian, Latin and West Asian entrepreneurs. I see young people who understand the “language of money” and use it to empower themselves with choice in life.
I see a global “silver rights” movement where capitalism and free enterprise will overcome the obstacles of being poor.
John Hope Bryant is chairman and founder, Operation HOPE and vice-chairman, US President’s Advisory Council of Financial Literacy. Comment at otherviews@livemint.com

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