I keep saying that this is not a global recession, but a global reset. What I mean is that the so-called prosperity we have experienced in years gone by is well, gone. We will no doubt see prosperity again, but it will look differently, feel differently, be different (meaning, that this time it will be real and sustainable) and I believe, be achieved differently. I have also said that this crisis is not about economics per se, but a crisis of virtues and values.
Think about the innovators and leaders you admire? They dreams big dreams, and were passionate about what I call the power of the idea. From Richard Branson and his Virgin empire, to Bill Gates and his Microsoft, and now his foundation, to the woman that founded Mothers Against Drunk Driving in the United States, to my friend Klaus Schwab, founder of the World Economic Forum and the Forum of Young Global Leaders, for which I a member, to the framers of the original vision for OECD itself. They were all driven by the power of the idea. The problem is that today and over the past 5-10 years, you have had individuals, all over the world, who woke up and said “I want to make money,” or “I want to be powerful.” This is the wrong ambition, and it led to the wrong outcome. The odd thing is, if you pursue the power of the idea, and you find a way to serve humanity, to add value, to empower people and to move our world forward, you will ultimately become wealthy (spiritually if not financially) and very powerful, but this was never the end goal. To quote OECD’s Joanne Caddy, “we have lost our storyline,” and finding a way forward, and developing and philosophy and strategy for sustainable global prosperity again will require that we get it back.
We have also forgotten who is in charge here, and why we do all that we do – it is about the people, and for the people. We have lost our storyline. When you understand that it is about the people, you can see that compelling statistic that undergirds the largest economy in the world (the U.S. economy with more than $14 trillion annually); 70% of the U.S. economy is driven by the consumer. And if the U.S. consumer is 70% of the U.S. economy, that means they are approximately 25% of the world economy. Put simply, when consumers in the U.S. stop buying (responsibly), factories in China stop building (more than 70,000 factories in China shut down last year alone). Message: in a global economic eco-system, we are all in this together. Quoting President John F. Kennedy, “we all inhabit this small planet.” In the backdrop of this global economic crisis, the world needs the United States to succeed again, and (new message), the United States needs the world to succeed too. We are all in this together. But none of this is possible, without a laser like focus on our ultimate customer – the people.
I believe the 20th century was about emerging democracies around the world, and the way to codify that in the hands of the average person was the right to vote. The right to vote brought power literally down to the level of the people, and it commoditized democracy in the minds of the individual who is saying “how does this relate to me?” Well, in a global economic system, I believe that financial literacy is a civil rights issue, and the first global silver rights issue. If you don’t understand what I call “the language of money,” and you don’t have a bank account today, you are an economic slave. In an environment where it is estimated the world will shed more than 50 million jobs in the backdrop of this global economic crisis (more than half of that in China alone), and where the Middle East is crying out for 100 million new jobs for a generation of young people (estimated that 60% of the population in the Middle East will be under 25 years old within a decade), we cannot continue to cry out for traditional “jobs” to solve our economic and soon social problems. We have got to nurture a generation of entrepreneurs, small and micro-business owners, and “self-employment projects.” We must empower people to solve increasingly help solve their own problems because governments cannot solve them for them anymore, alone. We must help people help themselves, and the door to self-reliance is teaching people financial literacy, the language of money and helping them “crack the code” of free enterprise and capitalism, in their lives. While doing this we must also remember that financial literacy is not a math class; money is emotional. Money is aspirational, and our relationship with money is impacted by many factors, from environment, to culture, to our parents, role models, even self-esteem, hopes and our dreams.
And the problem is not just now, it is next too. Quoting my friend Marguerite Kondracke, CEO of the America’s Promise Alliance in the U.S., “if we are not careful, the next group of underperforming assets will be our children.” Children are dropping out of high school in developed countries at an alarming rate (30-50% across the board in the United States alone). I believe they are dropping out because they don’t believe education is relevant to their futures. I believe that the way to make education relevant is to show kids how to do well, how to succeed, and even how to get rich (legally), and that is financial literacy, responsible free enterprise and capitalism, ownership, opportunity and entrepreneurship. That’s all about giving our kids their storyline back. We owe them that.
There is nothing wrong with free enterprise and capitalism. The problem was and in some cases remains the abuse of free enterprise and capitalism; the greed, the shorter-ism and the focus on “me” over “we.” In the good times, the only problem was that poor people did not have any capitalism, and did not understand free-enterprise, but in these times, it feels like almost no one does. If you are middle class today, you feel poor. Can I get an Amen.
Financial literacy is not the Holy Grail, but it is a critically important and much overlooked tool in the financial and economic recovery and stabilization toolbox. I believe it will prove to be a critical competency and a major portfolio over the next decade for any Head of State or serious leader on the world stage. Remember, 10 years ago individuals pursuing an environmental agenda was written off as “tree huggers,” and those advocating HIV/AIDS prevention were otherwise marginalized, but you cannot call yourself a respected leader today without having a significant understanding of, nor a public policy portfolio addressing either of these issues today. In the backdrop this global economic crisis, financial literacy is the new global public policy competency that all leaders must learn to master – for the sake of their people. It is for this reason that I am proud that I was able to compel then President George W. Bush to sign an Executive Order, inspired by our work at Operation HOPE, establishing financial literacy as the policy of the U.S. federal government, and even prouder to see President Barack Obama move this aggressively forward as part of his Administration’s agenda. Last week the Obama Administration announced a sweeping reform of our financial and regulatory framework in the U.S., including a call for a new consumer oriented agency, whose mission in part will be financial literacy. I am proud to serve President Obama as vice chairman of the U.S. President’s Advisory Council on Financial Literacy, and chairman of the Council Committee on the Under-Served.
What I keep telling my billionaire friends, is the best way for them to keep their billions, is to make sure that others make and keep some millions, thousands (our middle class), and hundreds (the poor on the first ladder of prosperity). It is not charity, but enlightened self-interest, and we can indeed find a way to do well and to doing good too. To do well by doing good. To foster a win/win society, versus win/lose. After all, we are all in this together.
John Hope Bryant is the founder, chairman and CEO of Operation HOPE, America's first non-profit social investment banking organization. His work and advocacy at HOPE led then President Bush to sign an executive order making financial literacy U.S. policy. Today, Bryant continues to serve as vice chairman of the U.S. President's Advisory Council on Financial Literacy as well as chairman of the Council Committee on the Under-Served, in President Barack Obama's Administration. Bryant is also the financial literacy advisor to the World Economic Forum Global Agenda Council on Financial Empowerment, and in 2005 was selected in the inaugural class of Young Global Leaders for the World Economic Forum. In August, 2009, Bryant will publish his latest book entitled LOVE LEADERSHIP; A New Way to Lead in a Fear-Based World, BY Jossey-Bass.