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by Thomas MacMillan | Aug 5, 2010 11:15 am

(27) Comments | Commenting has been closed | E-mail the Author

Posted to: East Rock, Campaign 2010

Thomas MacMillan Photo One candidate said Connecticut can create jobs through tax reform and more transportation and education spending. The other candidate spoke of how Newhallville can borrow an idea from Bangladesh.

The candidates are East Rock Alderman Roland Lemar and East Rock psychologist Debra Hauser (pictured above), who are vying to become state representative in the 96th General Assembly District. The district, comprising parts of Hamden and New Haven, is currently represented by State Rep. Cam Staples, who will step down at the end of this year.

The two face off in a primary next Tuesday for the Democratic Party nomination. They’ve been running hard.

On the trail this final week, Lemar and Hauser have been hearing a lot about jobs and the recession, and been offering their prescriptions for how to turn the economy around.

Lemar said Connecticut can create jobs and develop the economy by fixing the tax system and investing in transportation and education. Those investments could be funded by a more progressive income tax that would also serve the purpose of easing the property tax burden, Lemar said.

Asked about how to boost the economy, Hauser mentioned investment in early childhood education and changing the tax structure. She also brought up an untested concept, at least in Connecticut: micro-finance, or micro-credit. It’s a concept made popular by Bangladeshi economist and Nobel prize winner Muhammad Yunus, who advocates the use of tiny loans for poor people looking to start small businesses. Hauser said she’s looking at the possibility of applying the idea to poor communities in Connecticut, specifically Newhallville, a neighborhood just west of the 96th District’s Whitney Avenue border (which straddles New Haven and Hamden).

Tackling The Economy

During door-to-door canvassing in East Rock this week, Lemar shared his thoughts on this year’s campaign issues. He said the number one topic on voters’ minds is the economy. Constituents are particularly concerned about jobs, Lemar said.

“Folks want a comprehensive strategy towards growing jobs,” Lemar said. That strategy, he said, can be found through a combination of tax reform and investment in transportation and education. The state needs to invest in bus lines and trains and create options that will help the state to be more competitive. Such investment will create construction jobs and attract companies to Connecticut. “Businesses are more likely to come when the transit is there,” Lemar said.

Businesses are likely to stay if the schools are good, Lemar said. “Investing in schools keeps people here.”

The change that can have the most impact, however, is tax reform, Lemar said. “It’s so much more expensive to do business here.”

The state budget crisis is a moment of great promise, Lemar said. Things have gotten so bad that the budget hole can’t be plugged with a quick fix like raising licensing fees. “Everything is on the table,” he said. “It’s an opportunity to radically re-think everything we do.”

At this moment of opportunity, Lemar said, he’d like to implement a progressive tax system under which people earning over $500,000 per year would see an increase in taxes. “It should be stepped up from there,” he said. People earning over $2 million or $3 million would see even higher taxes.

Such a tax structure would allow the state’s municipalities to ease their reliance on property taxes. The property tax system is “so antiquated” and “so damaging,” Lemar said.

Hauser agreed that property taxes are too high. One source of the problem is that the state doesn’t fully fund Payment In Lieu Of Taxes (PILOT) to towns with tax-exempt property, like New Haven. She said she would work for the full funding of PILOT. To do that, the state should be more aggressive about going after federal funding, she said.

Hauser made her comments during a Wednesday afternoon interview in East Rock Park, where she was joined by her communications coordinator, Maureen Gaffney.

Hauser agreed that the state of the economy is a hot topic on the campaign trail: “Everyone says they’re struggling.” People tell her all the time that they’ve lost their job or they’re “barely surviving” or they’ve had to move back in with their parents, she said.

Asked how she responds to such statements, Hauser began by talking about financial regulation. “I don’t buy the economic axiom that markets are efficient on their own,” she said.

To address the economy, the state needs to invest in early childhood education and health care, Hauser said. That’s an “investment in the next generation,” she said.

Hauser also said the tax base needs to be expanded by bringing in more business to the state. Banks need to be encouraged to lend more money, she said.

Hauser said she’s interested in applying the concepts of microfinance to struggling neighborhoods like Newhallville. “I would like to explore the possibility,” she said. “Micro-lending in urban centers” could foster entrepreneurship, she said.

In developing countries, micro-credit offers start-up capital small-scale entrepreneurs too poor to qualify for a regular business loan. For instance, a development agency might grant a small low-interest loan to a housewife in rural India, enabling her to buy a sewing machine and start a tailoring business.

Asked how the idea might apply in a neighborhood like Newhallville, Hauser said she hasn’t looked at the possibility too closely, but thinks it’s worth examining further.

Hauser later returned to the topic of Newhallville when she talked about addressing poverty.

She told the story of how she came to know the neighborhood through her daughter, who lost her father, Hauser’s first husband, when she was only 9 months old. As a teenager, her daughter was drawn to teens from Newhallville, some of whom had also lost fathers, to death or incarceration.

“She only wanted to be in Newhallville,” Hauser said. “My daughter opened my eyes to despair and hopelessness I couldn’t believe.”

Hauser said that through her daughter she got to know Newhallville neighbors who had no way to go to college, no income. Many children there have been traumatized by the loss of a parent to incarceration or drugs. Trauma has become a consequence of poverty, Hauser said. She said she “saw the despair in the eyes of children” in Newhallville.

Tax-And-Spender! Flip-Flopper!

Lemar and Hauser both agreed on the need to fund PILOT. They both said property taxes are too high. They both said education and small business development are keys to economic growth. Where do they differ?

“I’m a more moderate Democrat. I’m more fiscally conservative,” Hauser said. She said she doesn’t agree with the $471.6 million city budget that Lemar voted for recently, which include an increase in property taxes. “There comes a point when you have to be more conservative,” Hauser said. “I would have voted against the budget.”

Asked later where she would have made cuts to the budget, Hauser said she didn’t want to offer any suggestions without looking at the budget. But she would have gone line by line and reviewed “every dollar” to look for areas to cut.

Hauser would have made a terrible mistake by voting against the proposed budget, Lemar said. Had the budget not passed as amended, it would have reverted to the initial budget proposed by the mayor, including an 18 percent tax increase and a dubious parking meter monetization deal, Lemar said.

He said the difference between the candidates is that he has from the beginning stuck to a platform of growing jobs through education and mass transit, coupled with progressive tax reform. Hauser, on the other hand, has changed her positions several times, Lemar argued. He has in the past said that Hauser has come late to campaign positions that he had long been advocating.

As an example, Lemar said Hauser backtracked on her initial support for a sales tax increase. “She was all for a sales tax increase,” before abandoning that stance and supporting a progressive income tax.

“I’ve always been a proponent of taxing people who make over $500,000,” Hauser said. She said she is the only person in the race who supports a progressive income tax on people earning over $250,000 a year.

As for the sales tax?

“In the beginning of my campaign I did not know every issue,” Hauser said. She said her research had found that Connecticut has the lowest sales tax of any state in the Northeast. “I had briefly considered that,” she said. She didn’t then know that a sale tax has a disproportionate impact of poorer people, she said. “I had not realized that.”

“I do think carefully,” she said. “I’m not perfect. When something’s not quite right, I amend it.”

Previous coverage of the 96th District race:

• Hauser Gives Foley $250
• Lemar Sews Up 96th District Endorsement
• D’Agostino Out; Lemar Targets Reentry
• Hauser, Lemar Square Off On Homelessness
• Who’s The Outsider? The “Clean” Candidate?
• Surprise! Lemar, Hauser Have Company
• There’s This Spot Called “Fair Haven”
• State Rep Race Heats Up in Fair Haven
• Tax Ideas Claimed By All Candidates
• Morrison’s Out
• Hamden Or Bust!
• Candidate Fends Off Foreclosure
• Hauser Wants Data, Involved Parents
• Hauser Pays $25K For Own Campaign
• Hauser Spending Means More $$ For Lemar
• Hauser Spending Triggers Another Grant To Lemar

Comments

posted by: Townie on August 5, 2010 11:46am

Micro-loans in Newhalville is a horrible idea. If this recession has shown us anything it is that our economy is too reliant on credit and the fiat money system. The recession is an important issue, but we should realize that this economic downturn is much more than a recession, it is the beginning of the death-spiral of the national economy. Therefore the candidates should focus on issues and projects that will allow for a successful transition to a different economic paradigm. State Representatives should be willing to call for drastic cuts in spending, a downsizing of government and an increase in attention to the improvement of the intra-state transportation system, among other issues.
Micro-loans “worked” in Bangladesh because their economy has a very low cost of living, therefore a small loan would actually help someone create a modestly comfortable life.
“Poverty” in Newhallville is not as crippling as poverty in Bangladesh. In New Haven there are agencies in place to assist those who need it and the job market, while diminished, still exists for those who are willing to work.
It would be nice to see a candidate who realizes the folly of our current system and addresses it. Our relationship with the Federal Government is one of dependancy, which it shouldn’t be. We should be able to function without aid from D.C., this increased autonomy would protect us from future failures of the national economic system. However, one can logically conclude that neither of these candidates will stand for actual change, but will only parrot back the same rhetoric that we have heard for decades.

posted by: FacChec on August 5, 2010 12:34pm

“Hauser would have made a terrible mistake by voting against the proposed budget, Lemar said. Had the budget not passed as amended, it would have reverted to the initial budget proposed by the mayor, including an 18 percent tax increase and a dubious parking meter monetization deal, Lemar said”.

Lemar’s statement is false and he knows that!

No budget can pass without approval of Appropriating ordinance #2, The Tax Levy. Lemar knew this yet vigorously defended the Mayor’s position, rather, rather than forcing the budget back for more revision.

Every since Lemar has been in office he has voted for each of the Mayor’s recommended budget increases, this year has been no exception, despite his clam to the contrary and his voodoo IBB line item education reduction.

Lemar has voted every year for increases in parking ticket fines, fees for all city documents, increases in fees to lighthouse park, capital budget spending increases, special budget spending,the never ending overtime budgets increases, and more recently increases to your auto tax, accompanied by increases to auto values.

Heck, he even supported rubber sidewalks. No wonder he’s walking with that bounce to his step in the photo above.

NHI calling this guy a Tax-And-Spender! Flip-Flopper!...is a gross understatement.

Lemar is your typical reverse look-out for politician.

East Rock and the 96Th district had better wise up….. before Tuesday!

posted by: robn on August 5, 2010 12:54pm

FACCHECK,

There are no fees to Lighthouse Park for New Haven residents. How many of your other points are gross exaggerations?

posted by: Jeffrey Kerekes on August 5, 2010 1:04pm

Micro-financing is an excellent idea and in fact, is already here in New Haven. I think this idea is a good one and should be expanded further. check out http://www.elmseed.org/ for more information. Small loans for people to start business makes a lot of sense to me. Some would-be entrepreneurs do not have the cash to buy the supplies to get started. For example, to some people being a painter seems a small investment, but if you want to be a painter, you need ladders and other tools for which some people just don’t have the cash. A micro-loan might be for the tools to get someone started and that money can be paid back over time. This is a smart community investment.

posted by: ROBN on August 5, 2010 2:01pm

CHR,

I dunno sister…I kindof think twice about a candidate who enters the race not knowing the impact of sales tax on poor people. Just sayin.

posted by: Observer on August 5, 2010 2:08pm

No one’s attacking Debra Hauser—and certainly not in this article. And in the grand scheme of things, this race isn’t particularly nasty, either.

Say what you believe about Hauser and her campaign—misguided as it may be—but don’t go after the Independent or Lemar for setting the record straight. At least he throws his barbs on the record instead of hiding behind lies on the doors.

posted by: Correcting the FACs on August 5, 2010 2:17pm

If the Board of Aldermen did not pass the budget the (or appropriating ordnance #2) the 3rd year of phase in would have taken effect with our without their approval thereby raising taxes!

posted by: FacChec on August 5, 2010 2:57pm

Robn:

The focus of this story is as follows:

“One candidate said Connecticut can create jobs through tax reform and more transportation and education spending. The other candidate spoke of how Newhallville can borrow an idea from Bangladesh”.

Your comments would carry more weight and creditbility if you would respond to the issues raised in this, and other articles, rather than create argument with other posters….

I will take this one opportunity to educate your lack of knowledge on the subject of the city budget.

Response:

The budget which Lemar supported, raised fees on the use and rental of the carousel, the rental and use of sheltered space for cookouts, and increased park department permits for the use of all parks in the city, resident or non-resident

Fees to enter Lighthouse did not increase for city residents with cars registered in New Haven, but did increase for the use of all peripheral uses once inside the park.

Lemar did not vote against and of these increases. This is not an exaggeration, but a FAC.

END

posted by: Townie on August 5, 2010 3:00pm

Kerekes: Micro-financing is not the solution to anyone’s problems in our post-industrial society. Bangladesh it works because their economy is still developing. So, a painter in Bangladesh has a relatively good chance of success compared to a painter in New Haven, whose business will most likely fail because of an over saturation of the market. Too many painters, not enough to paint.
If private banks want to take the risk of providing micro-loans than so be it. But, the government should not underwrite or otherwise provide funding for such risky investments. Let private enterprise remain private.

posted by: Following this Race and the Independant Coverage on August 5, 2010 3:13pm

I’m glad Lemar has read Hauser’s position papers. My question is what the NHI has against Hauser. Every time they write an article, it is HEAVILY biased. They privilege Lemar’s statements and quote him, then say that Hauser “agreed”, when in fact, Hauser has been publishing her position papers, then Lemar repeats what they say.

Could it be because Lemar is a whiner? ... Why, just today, there was an article about Hauser spending 250 to go to an opposition fundraiser and meet the candidate. This is not a problematic move for Hauser to have made, but it is emblematic of Lemar’s campaign style to call up the independent and whine about it.

I am glad to see some blow-back comments though. it seems to me that his whiny strategy is starting to get on people’s nerves, and that people are beginning to notice that the NHI is not covering this at all fairly. Every piece reads like a fluff piece for Lemar, filled with criticisms and backhanded complements about Hauser.

Is it too much to ask for some coverage on Lemar’s hypocrisy? Like for instance that he signed a petition to lower taxes (I have seen the signature), yet then voted to increase them immediately after (another emblematic action). I wish that that were an exception, but everything he says seems to be a misrepresentation or distortion of the truth.

and ROBN, Hauser may not have had her position on sales tax thoroughly thought out when she decided to enter the race, but she admitted it and justified her position when she felt well enough informed. No one can know everything about every issue, but that she was willing to abandon her initial position after doing the due research speaks to her commitment to the people over her image. Moreover, would you prefer a candidate who considers sales tax increases and abandons the idea when she decides it would negatively impact New Haven’s poor, or a two-faced puppet who pretends to want lower taxes to help people in need and then votes to increase taxes (like Destefano asks) at every opportunity?

posted by: FIX THE SCHOOLS on August 5, 2010 4:28pm

Ignoring the fact that micro-lending is, on the whole, a subsidy program because the overall cost of its capital exceeds its returns, it is wrong-headed to focus on credit as an answer to Newhallville’s concentrated poverty. Townie hits the nail on the head with several correct insights.

In this country, more credit is the last thing that we need. People need equity not debt. So how do you build equity without capital? Through knowledge that comes from experiencing a word-class education system.

Education is THE most important currency in the 21st century and we in New Haven have the keys to the vault- if only the politicians wouldn’t stand in the way!

Why is it that Yale University and Newhallville are adjacent to one another and yet are a study in stark contrast? Because knowledge is power, and power leads to prosperity. We have the ability to deliver world class education for all. Why don’t the candidates campaign on that?

posted by: Jonathan Hopkins on August 5, 2010 5:23pm

“Businesses are likely to stay if the schools are good, Lemar said. ‘Investing in schools keeps people here.’”
That’s not exactly true. Increasing funding for schools may create a better curriculum, nicer facilities, and allow for an atmosphere that encourages students and teachers to preform better, if we assume that the funding is well placed. To understand what may happen when large numbers of inner city students receive good educations due to the proposed increases in funding, we have to look at what happens now. Every normal public school in this city has turned out college-bound, conventionally successful students for decades. What actually happens with the majority of these students is that they stay in the city or area where they went to school. Many of my friends are living in Boston, New York, Philadelphia, Baltimore and California and are planning on staying at these places after college. New Haven gets left with the drop-outs, criminals and other unemployable people. There are kids from other cities around the country that leave their undesirable, dead-end neighborhood and come to the New Haven area, but they are moving into already successful neighborhoods like East Rock, Westville and Morris Cove, just like the successful students from New Haven’s schools aren’t living in North Philly, West Baltimore, Dorchester, or the Lower East Side, they’re living in the already successful neighborhoods of those respective cities.
Simply flooding education with funding while not seriously and aggressively pursuing the underlying issues of neighborhood instability is only going to continue and accelerate the process of exporting New Haven’s young talent because they want to get away from their destructive childhood friends, broken families and decaying community.

I think the point about Newhallville needing business start up money is pre-mature. What needs to be done first is to prepare people for running a small business or retail shop through classes and seminars. I think it would be great to have an organization that was a combination of Neighborhood Housing Services and ElmSeed that provided services to people interested in owning an small office, business of store but didn’t know where to begin. Part of this might include construction and rehabilitation of existing retail space in the city, similar to what NHS does. An organization that was part construction/rehab and part services, education and loaning would be a great help. Newhallville would be an excellent candidate and could coincide with the construction of the Winchester Factory apartment housing. It would be great if Winchester Avenue could be the retail shopping center for the new companies at Science Park. Buildings with ground level retail, second floor offices and third floor affordable housing could be a great way to stabilize Newhallville, which would have the effect of encouraging students to stick around in the neighborhood to find employment, housing and a local network of stores.

I’d like the candidates to look into a tax structure like this:
http://en.wikipedia.org/wiki/Georgism
I just recently became aware of it, and it looks interesting. Here is an edited discussion about it from the book “Home from Nowhere”:
http://books.google.com/books?id=4ZW_dvcbEqUC&lpg=PP1&dq=home from nowhere&pg=PA96#v=onepage&q&f;=false

posted by: Jonathan Hopkins on August 5, 2010 6:18pm

Fix,
That distortion has to do with the fact that in the early to mid 20th century Yale’s President James Rowland Angell aggressively pursued propelling the small local college into the global University that it is today. Simultaneously, Newhallville and New Haven’s other working class neighborhoods were decanting, shedding jobs, physically and socially deteriorating, and becoming home only to those that had no other options. This is what lead to the current gap between this world-renowned institution and the decaying neighborhoods surrounding. One was rising exponentially was the other was declining exponentially, which has magnified the divide.

New Haven used to send an enormous number of students to Yale, http://sphotos.ak.fbcdn.net/hphotos-ak-snc3/hs174.snc3/20155_1226206610395_1085910074_30557028_3606918_n.jpg , and I think it will be at least two generations before we see another relationship between Yale and Newhallville like this. One generation to stabilize neighborhoods to become self-sufficient and another generation to become excellent and exemplar. Of course that’s assuming that effective policies, proper economic conditions and strategically allocated funding exist for two generations.

posted by: Funny b/c it's true on August 5, 2010 6:31pm

Having looked into Lemar’s voting record and read about how he promises to lower taxes, I have made a cartoon that I believe accurately summarizes his politics.

http://img442.imageshack.us/img442/1930/gopherlemar.jpg

posted by: robn on August 5, 2010 8:50pm

FACCHECK,

I stand corrected. Its 10 bucks for non-residents to park at Lighthouse and a whopping 50 cents to ride the carousel. A SAWBUCK TO RIDE THE CAROUSEL!!! HANG ROLAND FROM THE YARDARM MATEYS!!! ARRR!

posted by: robn on August 5, 2010 8:54pm

FTRATIC,

I’d rather have a candidate that knows the basic subject matter pertinant to governance.

posted by: Brian V on August 5, 2010 9:38pm

Flip Flopper is correct.
Please check out this article:
http://www.newhavenindependent.org/index.php/archives/entry/lemar_pushes_foragainst_school_budget_cuts/

It starts with Paul Bass writing:
‘In May, Roland Lemar pushed City Hall to cut schools spending in order to keep taxes down. Thursday, he showed up at a rally to stop City Hall from cutting school spending.’
Read the comment by “talking out of both sides” It really lets you know how two-faced Roland was on this issue.

And Streever….
[Y]ou give Roland credit for the (only)4% tax increase. PLEASE! The only reason he even pretended to put up a fight was because NHCAN pushed him on it. Give credit where credit is due…

posted by: Morris Cove Mom on August 5, 2010 9:48pm

Would either of them, if elected, even have the power to raise the CT state sales tax? If yes, focus it, vote wisely. Up the sales tax on clothes over $200, and alcohol and cigarettes. If this society wants to be a consumer goods driven society, tax them for the choice of how they spend their money on luxury items.

As for property taxes, New Haven property taxes are a joke. Mine have doubled since 2006, and if I had known what the future held, I would not have bought a house here.

As for income taxes, feel free to tax the hell out of people making $250,000 or more. I don’t know anyone that does. It would take my household more than 6 years to earn that much!

Maybe both candidates should remember that the “real people” that will vote next week are most likely earning less than $50,000 a year, have children in public schools, and are mad as hell about all taxes.

Forget the sidewalks and micro-loans. Talk to me about how to keep my lower middle class standard of living, and how to keep it without going into debt or foreclosure.

posted by: Walt on August 6, 2010 5:56am

Makes little difference to Hamdenites like me who lack representation in the
General Assembly, being just insignificant add-ons in the 96th District.

Both candidates are East Rockers, and seem to have no interest in the needs of their folk in Hamden,

So too, presumably, their opposition.

Nothing new, but still irksome.

posted by: Swatty on August 6, 2010 10:51am

picture is worth a thousand words.

The Independent needs to be careful with the photos they run. To my advertisting minded eyes, putting a picture of LEMAR with Lemar and no WORDS with Hauser speaks loads!

Just saying.

posted by: angelo on August 6, 2010 11:05am

the funny part of this never-ending food fight is the self-indulgent notion by the repeat (and repeat and repeat) posters that anyone cares who they vote for, who they work for, what they said last week or what they said tomorrow. There’s too much self-importance going on. CHR and DS - you can hug again on Wednesday.

As for microfinance, noone has yet defined it correctly and the descriptions are much more like small loans. Big difference. Fix - tell Accion that you can’t make money through microfinance.

posted by: FIX THE SCHOOLS on August 6, 2010 5:17pm

Angelo,

Accion doesn’t make money on micro-finance. Accion is a not-for-profit which generates a significant portion of its revenues from grants and contributions. As stated before, Micro-lending costs more than it returns - ergo the need for subsidies.

It’s fine if philanthropists and foundations want to donate money to lend to poor people around the world at below market rates of interest. In some places the program actually transforms some lives. But it doesn’t work broadly and it hasn’t worked here.

In the U.S. the over-availability of credit for people who had no means to pay it back was not an insignificant contributing factor to the current recession. Access to credit is not the problem in the inner city. The largest problem by far is the lack of high quality education. Ask the good folks at Workforce Alliance what the main objection by employers is in placing people in jobs - LACK OF ACADEMIC PREPARATION.

Deb and Roland, people need to know how to read, write, and do some math to be employable or to start a small business on their own. And in our high-cost part of the country most people really need to go to college in order to expect to live a prosperous life. And guess what? Your solutions of early childhood education (Deb) and COMMPACT schools (Roland) don’t begin to get us there anytime soon.

I don’t know whats more disappointing, the lack of substance and ambition in either candidate’s education platform - or the lack of recognition by some of their highly educated supporters that fixing our schools is the most important thing we can do to eradicate poverty in our city.

posted by: An East Rocker on August 7, 2010 9:37am

This may be a bit off topic, but from here in east rock, I can honestly say the following:

Hauser’s mail outs definitely beat Lamar’s. Bigger, more colorful, slick messages (“real woman, real understanding” with lots of real women, targeting, I assume, the mommy vote), and just plain larger.

She had no street presence. Streever, Elicker and other minions have been knocking on doors and I have seen poor Lamar on several occasions walking around in a tie during those miserable humid weekend afternoons trying to drum up support. Haven’t seen or heard a peep from Hauser.

Hauser has taken a beating from NHI and mostly well-deserved.

I vote Lamar.

posted by: Tired!!! on August 8, 2010 12:31am

I will be glad when the elections are over. My mailbox is full of ad campaign flyers, my house phone does not stop ringing with voice mails endorsing candidates. My cell phone is ringing with 6 to 7 political phone calls a day and now there are knocks on my door.
I’m tired, funny thing is once elections are over and you need help no one can be found.

posted by: Bill Saunders on August 8, 2010 2:30am

Swatty,

Placing text in Hauser’s picture would only distract the viewer from the subliminal tic-tac-toe and hangman games scrawled on the picnic table.

So Paul,

What happened to that post I sent regarding junk mail based voting?
Didn’t like my picks??

posted by: angelo on August 8, 2010 10:22am

From http://www.kiva.com

“Microfinance programs have generally targeted poor women. By providing access to financial services only through women—making women responsible for loans, ensuring repayment through women, maintaining savings accounts for women, providing insurance coverage through women—microfinance programs send a strong message to households as well as to communities.

Many qualitative and quantitative studies have documented how access to financial services has improved the status of women within the family and the community. Women have become more assertive and confident. In regions where women’s mobility is strictly regulated, women have become more visible and are better able to negotiate the public sphere. Women own assets, including land and housing, and play a stronger role in decision making.

In some programs that have been active over many years, there are even reports of declining levels of violence against women.” (CGAP)

10. Can microfinance be profitable?
Yes.

“The November 2001 issue of the MicroBanking Bulletin includes data from 62 self-sufficient MFIs. The average return on assets for this group is 5.5%, which compares favorably to commercial-bank returns. Indeed, there are grounds for hope that microfinance can become attractive to mainstream retail bankers.

At the same time, some worry that an excessive concern for profit in microfinance will lead MFIs away from poor clients to serve better-off clients who want larger loans. It is true that programs serving very poor clients are somewhat less profitable than those reaching better-off clients, but this may say more about managers’ objectives than an inherent conflict between serving the very poor and profitability. MFIs serving the very poor are showing rapid financial improvement. Microfinance programs like Bangladesh Rural Advancement Committee and ASA in Bangladesh have already demonstrated that very poor clients can be reached profitably: both institutions had profits of more than 4% of assets in 2000.

There are cases where microfinance can not be made profitable, for example, where potential clients are extremely poor and risk-averse or live in remote areas with very low population density. In such settings, microfinance may require continuing subsidies. Whether microfinance is the best use of these subsidies will depend on evidence about its impact on the lives of these clients.” (CGAP)

while we all know that education leads to better employment, not all jobs are dependent on more education. Increasingly, studies show that many entrepreneurs start businesses instead of continuing their education. Starting a news business is difficult, but microfinance works when properly focussed and when connected to a social/economic network. Giving a $2000 loan under conventional terms is not microfinance.

posted by: Al on August 11, 2010 11:34am

I have to take issue with a piece of this story. Of Hauser, the writer says, “She didn’t then know that a sale tax has a disproportionate impact of poorer people.”

How, exactly, does a flat tax disproportionally affect any group?

It seems to me that a sales tax is the most equitable kind of tax there is, because everyone pays the same tax for the same product—rich people and poor people alike pay 6% on items, period.

What it looks like is the “Independent” finds fault with a sales tax precisely because it IS fair to all parties, something the liberal agenda fights against: Why should a poor person have to pay the same amount of sales tax on batteries, for instance, as a rich person does? Why shouldn’t the rich person pay more, just because they can?

That’s the liberal mind-set that more and more Americans are coming to see is flat-out wrong. It’s unfair, and is just one more way to complete the nanny-state.

My question is, why shouldn’t everyone pay the same amount?

I’m very disappointed in the Independent, and not just because of the typo (“of” instead of “on”). I’m disappointed because instances like this are glaring examples of the bias of today’s so-called “journalists” and also an example of why people think the media today is untrustworthy. Perhaps your liberal readership will accept biased statements like that without question; but more intelligent readers will stop, and say, “The Independent is not independent at all. I cannot trust what they say because they have an agenda they feel no need to put aside when they cover news.”

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