he said how can you turn down by work and print this fifth rate artist's cartoons. no, no, third-ranked artist, he said. so they have quite a fun working relationship, and he wrote a play called "the male animal" which is was made into a movie, but a strong buckeye fan in ohio. he isn't real fond of the football program at ohio state, and he takes some shots at it. so, very indirectly because he never refers to the university by name. but it's quite a fun film. walter mitty is pictured here. that's another thing people often associate with thurber. one of his better pieces because it was put into a movie. and he is a daydreamer, his wife

constantly getting at him, and he was saving the world again. this is jamie's room. james thurber stayed in this room the years he worked and this is one piece we know did belong to him. when he was young reporter at the columbus dispatch, and he has a collection of "my life in hard times" and writes about incidents that happened to him in columbus. one of the hilarious stories is the day the dam broke and there was a flood in 1913 and it was a serious flood that took a lot of lives and cause problems. but he takes the good size and talk about the panic, people screaming we're going to do go east, young man, go east. but thurber had these experiences and wrote for the dispatch on that type writer.

james thurber is one of our great local boys that made good. so that pretty brought people to wanting to restore this house, and having it open, not only is it now open for touring, just to talk about thurber, we have a writing academy, which children can sign up for saturday morning. we have camp programs. we bring in authors, adults. we have adult writing classes. so, thurber as a writer has given thurber house a chance to make columbus a center for great writing, and remembering great writers like james thurber. >> for more information on book tv's recent visit to columbus, ohio, and other cities on c-span's local content vehicle tour, visit c-span.org/local content. >> this week, cuton, division of the book publisher penguin, announced they're moving up the release date of the first-hand

account for the attack on osama bin laden. the writer talks about the raid and the evening of the attack on osama bin laden in pakistan. the book, no easy day, a first hand account of the mission that killed osama bin laden well by published this coming tuesday, september 4th and is already ranked number one in book sales on amazon.com in response to mr. owens' account, the pentagon has threatened legal action, claiming the author is in violation of nondisclosure agreements he sign. mr. owens' lawyer and publisher plan to proceed with the release of the book. for more information about this story and other book industry news, visit our web site, booktv.org. >> coming up, hugh sinclair, who has worked for several microfinance organizations, argues the microfinance craze has done far less to alleviate

poverty in the world than most people realize. this program is an hour. >> welcome. it's an authorize be preparing the corporate list of -- i've worked with 5,000 whistle-blowers over the last three decades and i can say that -- unsenior passed -- -- what motivate you to join an industry like the microfinance industry? >> well, initially i joined it with the belief that his would actually be an effective tool to rad indicate poverty. so i was just as naive as most people remain to this day. seemed like a very good idea. recycle loans to poor people at low interest rates, to help them build a business and to earn their way out of poverty. so i went into it with this

naive idea, and then gradually as the years win along, the truth is more complicated for that. >> let's get down into the lay of the land. can you describe what is the microfinance industry and who are these mfis that your book keeps referring to and exposing? >> i mean, we're all familiar with the image of the $500 loan to the woman who buys goats or a suing machine. all this money is channeled to the poor through small local banks or sometimes large local banks. what happens is people in the united states and europe who fund these things generally go through an intermediary so they give their money to institutions such as kiva, a famous one that you -- deutsche bank, citibank, the traditional wall street

companies, dedicated microfinance funses such as blue orchard, the biggest one in the order, and then you have the foundations. so in d.c. we have two examples, such as the foundation u.s.a. and calvert foundation but there are whole hot of these institutions. you give your money to one of these intermediary asks they apparently invest this in the -- in your best interests and in the best interests of the poor by channeling this money to these small banks in developing countries that are going to do effective microfinance. that's the idea. that's the theory. >> well, this book has been promoted and my understanding is that members of the church congregations, people making responsible investments are flocking to this opportunity. tell us about some of the people providing the money. >> it's now become what mott

people would say is a huge bubble. it was extremely overhyped as a miracle cure and it managed to attract money from unbelievable sources and in vast sums. currently the private microfinance capital invest is $70 billion and is growing at probably at least a billion or two billion dollars a month. so it's a huge industry, and the problem that people don't really think about is, for all this good will, of all these individuals, philanthropists, churches, organizations, people people such as usaid, and equivalents in different countries, nor rad in norway, invest fast sums of taxpayer money in microfinance on the basis of this belief. but what they don't take into account is when you got a

$70 million sector, you've also got something of the order of $30 billion a year being paid in interest, and this is money which is being taken out of these poor communities. and this is the sort of hidden side of microfinance that we try not to talk about too much, is we talk about all the positive impacts but we don't talk about the negative impacts. >> well, we -- let get down to reality now. what is the hidden agenda of the microfinance industry and can you describe consequences? >> i mean, it's difficult to brand the industry with one brush there are good industries out there, good lending platforms, so it's not fair to say that the entire sector has been hijacked, yet. it's getting there. the main agenda, it started off as a development tool and gradually shifted to becoming a

profitmaker and we told that private was required to make these institutions self-sufficient and to have enough money to be able to grow and to cover their costs and to expand outreach. but what was really behind all this was we need them to just be profitable, and the way to make profit out of lehning money to poor people is to charge very high interest rates, and when they don't repay, to come down on them hard to make sure they do repay. so, you need to -- as the profit motive seeped into the sector, it causes two problems, which was, one, very aggressive recovery of defaulting loans and the other was to increase interest rates and the profitability of the institutions as much as possible, without actually ideally without pushing people into outright default. just finding that fine line which is charging enough interest rate that the people can just afford to repay, even if it means they have to

refinance at other institutions or sell their pots and pans. you have to fine this optimum level. so profit is the driving force behind the sectar. >> what are are we talking about in terms of interest rates? >> everyone talks about, for example, the famous bangladesh bank that won the nobel prize. they charge interest rates of 20-25%, which is actually extremely reasonable in microfinance terms, even though people cash would probably burst into tears about loans coasting that much. that's the exception. most interest rates are -- it's very rare to be under 30%. actually quite trier be under 50%. it depends on the regulations in the countries, but if you look at many countries in africa, when all the costs are considered, it's well over 100%. and the worst case i've come across so far, which was detected by the sensory economic

development here in d.c., he analyzed the interest rates of the bank in mexico, which was charging a total cost to the poor of 195%. so, you can see how this can pretty quickly become fairly profitable. that's the highest i've come across. about three years ago i began refusing to work with any institution that charged more than 100% and that probably reduced my potential client base by half. and really ruled out most of africa and large parts of latin america. >> so, as interest rates of 100% or higher, what are the human cobs sequences -- consequences, making their life better? >> obviously when you're a big these interest rates its becomes difficult to generate net profit. difficult enough just to pay the. so the idea of actually getting out of poverty is slightly out

of the window when you're looking at these rates, which is why we see, if you look at the academic research on microfinance, the proponents of microfinance will cite very carefully selected research papers, often that they fended himselfs. and poverty is about to be eradicated. you look at david reutimann, conclusion after ten years of research was the overall impact has been zero. some people win, some people lose. but overall there's been no credible impact on poverty reduction. >> there's a famous report funded by the uk government. it was led by an economist, and she and her team analyzed 2,840 academic papers spanning 35 years of research in microfinance and concluded the impact had not only been zero

but had been a terrible situationed opportunity that we could have used the money more useful and instead put into it microfinance. so these are rigorous independent academics looking at the evidence and saying, you know, i'm sorry, you can show me a few isolate cases on the web site of the woman with the goat who did well but you know, it doesn't stack up. there's 200 million people who have currently receiving microfinance loans. the microfinances sector very openly boasts it's aiming for the billion mark. we have to give credit cards to 8 billion people. and on the first 200 million there hasn't been such expectations by a wide margin. >> is the money going to help small businesses or just the interest rates are too high? or what is it being used for? >> this is another aspect of the microfinances myth. we're funding the female entrepreneur to start her

business and get the goats and the suing machine and all these things. if you actually look at where most microfinance is used in practice, it's not quite as clear it's actually being used for any entrepreneur activity whatsoever. john hatch, the founder of thinker, a verplank microfinance network, he estimates in the harvard business review that up to 90% of microfinance capital is used for consumption. used to buy a tv, buying some clothes. very little actually gets to any sort of entrepreneur. so i was shocked at that. i would have guessed from my sort of nonacademic gut feel it was probably close to three-quarters. but really this is one of the main destinations. but the other problem is, if you look at the main crisis facing the sector, every -- there's a report which looks at what is really undermining microfinance

each year and it changes every year. this year it is over invested, which is to say it's not that we don't have enough microfinance. it's that the poor are so overinvested and what the microfinance sector doesn't like to discuss openly is the amount of microfinance which is simply used to pay off the loans at another microfinance institution.

tbilisi mild and music is the bank's concessional we are going our portfolio each year. we have a hundred percent repayment rate. a lot of money in interest income. keep given mr. money.

which one is next? send some money at the moments. peru and mexico are probably going to be next. standard cycle that these countries go through. some very gut-wrenching descriptions of the dark side for people that have not heard by the micro financing industry. talk about prostitution to one child labor, even suicides. can you describe some of these consequences for us? >> yes. i mean, the real scandal that makes this, the region of india where the "wall street journal" had actually reported an article that there was evidence of

clients facing such pressure that they were being driven to suicide. this is, of course, widely ignored, but there were attacks against the "wall street journal" for daring to criticize the miracle cure. unfortunately what happened was these rumors carried on circulated and eventually the indian government stepped in and published a report which is available, thus surf report. documented 54 cases of women committing suicide as a result of the hands of extremely aggressive loan officers. in actual fact if you look at the report it was 53 suicides in one murder because there was a disagreement between a husband and wife of whether she should repay the loan are not, and so he killed her. fifty-three suicides in one murder. forced to as a way of earning enough money to repay the loans to become prostitutes. and then one particular low point was the case of a woman

who was unable to repair loan. we pay the mother's loan. so far in the microphone ancestry, have to stress, these are isolated cases. these are the worst cases. the report has only uncovered cases in one region of one country. whether there are other parts of india where this has happened or other countries. >> some grants for hope. some of them are fighting back, such as occurred in nicaragua. can you tell us about how many

people are standing for themselves? >> it was an interesting case. did not really make it to the mainstream media. over -- able to present a version of accounts which generally boil down to the leftist politically motivated corrupt governments who allowed a revolution to happen. it was manley bland on the government's. the -- what happened was two banks attempted to imprisoned 39 repaying clients in the north of nicaragua. they managed to get these people imprisoned and their families resist -- rebelled and picketed. eventually it led to a little revolution. eventually this attracted the attention of the next door town and an extra town and the next door town. it became a movement.

they -- i have to say, that did not behave entirely well. they burned down a couple of microfauna structures. they kidnapped some staff of the micro finance branch was not very good. they blocked in connectors of the pan-american highway. at a big problem on their hands. millions of people say we are going to repay these loans. unfortunately a loans themselves were not entirely legal. there were supposed to obey interest-rate caps. it varied. typically in the '20s. and there were all charging, openly charging multiples. you can even go on to their website. we have a 50% return on portfolio. if you just wanted for% per year how can you possibly make 50% to your portfolio? it was really not much attempt to even hide what they were doing.

the thing which is really unfortunate for the micro finance community was this is one of the first times only had to confront the reality that it was our own beneficiary who had rebelled and refused. they fought back on us. it was very embarrassing. how to explain to americans and europeans that we are helping the world of poverty in that these poor people are just so internally grateful to us for these bargain loans. in actual fact they're rebelling by the million. obviously hush it up. no coverage in america, no coverage in europe guy in the entire thing was just planned on the leftist government of nicaragua. >> the government accountability project, the sound of professional suicide. and you didn't -- not just blowing the whistle on micro finance conferences, i think he blew the whistle at every employer that you work for

internally. how does the industry react? >> yet. i'm not particularly employable right now. at the end of this trip. there are a few good institutions. good institutions that i'm still working with. one has actually said that they are explicitly not going to fire me. two of them are waiting to see what happens, and then make a decision shortly. i don't exactly know what's going to happen, but the really good example was one way to blow the whistle is to buy shares in the company and go to the atm and stand up and ask for the embarrassing questions. so we did this with as in bank ag and in holland. ims that thousand euros. this ridiculous bank. and i stood up and said, could you explain -- actually, i didn't stand up. i planted the question.

helping some money out of poverty if you're charging interest rates of 126% which is verified by rate is the season has been confirmed by the interest-rate decorator. they did not know what to do. they announced an emergency coffee break and then what was really interesting was that the banks to my think it was two months later, they published in the newsletter a very detailed article about how interest rates are generally between 20730%. to calm everyone swears this was just another radical person speaking to the ag and. if any of the investors had bothered they would have found that that actually the interest rates work, i think we said that there were 125. according to micro the

washington d.c.-based ratings agency, under and 26. of course this is details that the investors will never find out. there will never do any diligence. the key giving us the money. so long as we keep giving them the photos and a long stories and photos a predominantly goats and sewing machines. >> don't want to underestimate the back bless your descent. it describes how you have been sued, threatened with physical violence. share a little bit of that for our audience. >> when i -- well, first of all, in fact, another washington-based company, world relief, they were the first to bite me when i pointed out that taking plan savings from some of the poorest women in the world, taking their savings and using them to cover operating expenses raised some ethical questions, so they fired me. when i was working for the

dutchman, the finance fund, triple jump, we invest in a particularly questionable institution. there were a pro the people here who are familiar. and we take this money. with of completely explaining exactly what we were doing with it we put it into the same question will institution in nigeria which obviously was very good for us. protected our own investment. we just sort of give them a nice report and said, oh, you know, it's in this institution. so, really crossing over some bread line. we were taking other people's money that they had entrusted us a new lending it. something that we knew full well i had been down to nigeria on

two occasions for extended trips we knew exactly what these guys were doing india we decided to cover that. i confronted the management and then i was -- i was told to leave the office immediately. subsequently tried to the -- i don't want to say the word bribe. you can see on the website the actual letter that is sent me. the offer me a nice race to become a consultant to the company. additional company chilly causes. into the institution into never speak badly. otherwise it would take mccourt. so employment lawyer. she says this is a ridiculous other, completely illegal under debts and plan a lot. but card. you're going to win. you don't even need to go into details of what they actually did. go to court. this is a total breach of

discipline a lot. then me 53 accusations against me, may 2 against them. i won the case. you can go. this was to my tank, one of the first times a microphone its investment fund had been held accountable for their actions. >> turned down the context. the situation behind will relief. world relief. >> money from churches. the world association of evangelicals or something. the institution in question, mozambique, before eventually went pickup was called the fund of community credit. it went bankrupt shortly after. >> questions. >> sure. >> okay. >> we have a mike here in the middle. [applause]

>> i was a moderator for the first-round of conferences. this was before they coined the phrase micro finance. and at the time they were exploring what they called indigenous credit system's. and that is the reason why i was a moderator there. and at the time i don't think anybody had the conference ever envisioned something like what you're describing now.

is there anything in your opinion that could have been done to prevent his vision from being hijacked? >> that was a key point. if we actually look at what he said, he said, let's provide affordable credit to on to dinars to build their own businesses and grow out of poverty. and that is an excellent idea. the people who practice that to the state having a positive but on poverty. the problem is that the vast majority of micra finance does not do that. if we actually did what he said we would not be in the mess that we're in right now, and if you have a look. when you mention the origins of micra finance, if you look at the origins of the financial systems of north america and northern europe, when there were

trying to extend financial services to the poor it was with the savings and credit co-ops, some of which exists to this day, use savings and credit skills from the model in germany to you could argue bank good racket which is now the biggest macrophyte institution in the world. nonprofits savings and credit co-ops. we have done now despite the success of this, despite the fact that those did it grow into mature financial sectors hundreds of years later, we have done now is thrown out this idea of the for-profit and basically fallen for this month for which the your time and time again. the only way that you can make anything work in the world nowadays is with shareholders and wall street's. this is apparently the only way out. yet that is not what we did. this not what the germans did to me now with the dutch did, now

with the canadians did. look at the origin of the canadian financial sector. it was the savings in critical ops. it was not -- it did not have this total pure free-market capitalism behind it. now we're told, if you don't have shareholders and wall street involved in will never take off. >> thank you. >> my name is daphne. i did a fair one of research on micra finance about a decade ago, and we warned that in part due to the policy measures that the world bank was pushing on the micro finance industry, namely not to specifically target women, not to have the ceiling on interest rates that this was a -- basically a crisis that was going to emerge. of course we were shut it down and told that we had no rig to be raising these concerns.

so that is point number one. i have not heard you mention though bowl of the world bank in pushing this model of -- which they started. my understanding to buy another consultative group to assist the poor, their first foray into micro lending. they essentially pushed this as a condition of structural adjustment loans around the world. so they are implicated in this as well. the other thing i wanted to point out is, everybody talks about mama's, but self-employed women's association, india preceded him and had a very different model that was more focused on health care, child care, and labor organizing in addition to micra finance. it was not micra finance without all of those other elements. and i think people give too much credit, i think.

>> with regard to the world bank, the ifc, to be honest, i have a policy which started on my first-ever project in micra finance which was in mexico. never ever walk with those guys for as long as i live, and i have nothing to do with them. but when he mentioned the consultative groups to assist, this is the sort of world bank spin organization for promoting micra finance. it is very interesting what they did. they started off as the consulting group to assist. micro credit. that didn't work. so they change the name. now it's chased to the consultant group to assist just the poor. and it does not have to that the micro finance. micra savings, whenever. that didn't work either. so they came up with this new idea which is called financial inclusion, the classic case of shifting the goalpost. when they realize that actually micra financing was not having any impact on poverty it became

difficult for them to justify. they then said, don't we just say that the problem is that people are not included because then all we need to do is include them, charge them and as interest-rate at the same time, and then begin said that we met our goal because our goal was not to actually alleviate poverty but to give them all the credit card. so it is a classic case of just, you know, they make a claim. they fail to reach its kucinich days ago, chase the goal. the next one, who knows. he knows what will come into their minds next. with regard to, i agree with you totally. the idea of offering credit in conjunction with the services is referred to as micra finance plus. so with education, health care, whatever. there are a few institutions practice in this, but it is very expensive, and if it is expensive is not profitable. it's not profitable than you can't get the investors and board. you can't ipo in you can't make, you know, package it up into

some securitization and said it -- selig on wall street. it is kind of out of favor at the moment. that is one of the problems. with regard. [indiscernible] receiving too much credit, i mean, personally, i think that his initial goal was very -- was very worthy, and i wish that we actually went back to what he said. and if you look at them preaching on the subject of interest rates, for example, he is a vehement composer of extortion interest rates. he actually said a ballpoint i can't believe that we have become the money lenders that we were meant to get rid of. which is a terrible confession from such a worthy person. it does not explain the fact that if you look at him for example, the foundation based here in washington since then, they are the main investors. found most recently to recharging interest rates of

144%. so we have to be careful when we listen to what he is preaching and compare it to what is actually being practiced and who is practicing it and are they practicing this in his name. there is substantial evidence for that. when the list above party organization was mentioned on the front page of the new york times a number of investors pulled out. there was a lot of scrutiny. this was like yet another microphone and scandal. a few months later low and behold they were rewarded, the nigerian institution was awarded a price. i think it was a social on to power of the year something by the foundation, world economic forum. he sits on the board? mohamad yunis. so we have to ask some difficult questions about what exactly is his stance on extortionary interest rates because it is not quite as clear as it looks.

>> maybe you could also show us your experiences with the inter-american development bank in mexico that had sparked your boycott of the bank. >> yeah. when i first came across the inter-american development bank which is not a natural -- aiming to eradicate poverty in latin america, we originally had a mission statement that the institution of was working and which was to help the poor indigenous women in the highlands to use my car lines to build businesses and to alleviate the poverty situation. it was a pretty standard mission statement. they came down and are offering us money. they have some questions with the mission statement. they went from line. why don't you just do people in general. okay. fair enough. why just her less? well, that is where the poor people are. there are people all across the

airport. okay. describe the work highland. this, just very, what about just loans in general. why limit yourself just a small loans. okay. said debt. what given debt. okay. and micro entrepreneurs, just only people with small businesses. a lot of other needs. what about if someone needs to a buy something, for example. you know, why don't you just to loans in general. and if you wanted to all of these to me if you want to take these small modifications to your mission statement and we would be very interested in investing in your institution. what happens? he says, yes. cool. right. scrap the whole thing about women, the highlands, entrepreneurs, everything. we are going to become a small consumer credit organization based and affection for money. that was the last -- that was the first and last time i would

be entered development american bank. [indiscernible] >> thanks. my name is ken watson. i have looked at and evaluate, a number of micro credit operations over the years. and as an economist personally i don't find anything wrong with small credit organizations. expanding the access to credit seems fine to me. a very complex subject. i released it up to make a couple of -- contribute a couple of points. one must the way you have portrayed things as if these companies are making piles of money charging too much interest well, maybe they are charging too much interest. by and large, the ones i have the economic powers of money. quite the opposite. the only way most of the organizations i have seen survive is by constance influx

of grant money to the extent of about 20%. to they don't make a profit. now, maybe that is problematical or maybe it is not terrible if you're trying to reach the port. that kind of subsidy is necessary. the point is, the picture that says this is abcaeight rapacious industry but is making piles of profit is not quite right. it might be rapacious, but not the profits. the second point that i thought was worth contributing is that the core idea of finding small entrepreneurs was a very important idea. part of the impracticality of some of the micro credit to

operations has been that the loans have been too small to find viable businesses and secondly, you're dealing with people who do not have business skills. there are some small operations, for example, a canadian program in southern africa that tries to address these two problems. tries. you mentioned the 19th century, twentieth century cooperatives. tries to bring some of the cooperative idea to developing skills and making loans at a scale that can actually find viable businesses, although small ones. so i think those two points, it's not to say that there are problems. i think it's complex and that think there are these other aspects. all right. i'm just going to pick up one. i am quite clear, hopefully, and

what i have said and then the book, i urge the reader not to throw the baby up with the bathwater. there certainly are good institutions command a don't want to suggest that everyone is up charging 195 percent enforcing limits to suicide. that is not the case. there are good institutions out there. to downplay the profit motive is very dangerous. if we take, for example, the first ipo in mexico with 195 percent interest rate, now, if we look at who the investors were in the beneficiaries, we have our friends, the ifc, but the u.s. ngo. now, they invested $200,000 of their own money with $800,000 from usaid into equity. when they did the flotation they made $270 million which even by wall street standards is a pretty decent return. so although these isolated

cases, these are the cases which everyone is looking for. what is the next. so we didn't -- we then had the case of sks in india. this was touted as the second-best micra finance institution in the world by the next market. supposedly ago source of information on such matters. it was 14 times oversubscribed. so facebook recently was five times oversubscribed. this is a monster ipo. the ceo was the highest-paid banker in india that year. his total remuneration in the year of the ipo was $60 million to mob which she took -- to 13 in cash. now, this equity is not really very valuable anymore because they share price subsequently fell 95% when it became public knowledge that actually sks was one of the worst offenders in the aggressive debt collection

methods and is listed frequently in the reports in conjunction with the 54 suicides. the regulators at this point panicked, came in, clampdown on the operations in india and as a result of regulations the share price collapsed. .. these are only the ones that make it very large and actually

launch the stock market. but before going to the ipo, they pass through an intermediary stage, which is when they convert from an ngo to a for-profit company with shareholders. show to fact is we're an ngo, we don't make any profits so how can we be evil, this is flawed. it's the standard model in microfinances. you starts a an ngo, gets soft money in lots of donations, grants, usaid, all these people pump the money in and you can't call it equity because equity is a for-profit convince. you build up reserves so you can be extremely profitable as an ngo. you just can't distribute the profited to shareholders. so there's nothing stopping through converting to a for-profit shareholder driven company at a later date. it's called in microfinance world transformation. this is the big holy grail. the lesser of the two holy

grails. so, build up your institution with soft, nice donor money, convert it to a for-profit institution, at which point all the shares are then distributed to the mappingment and -- management and some of the people who provide some of the original seed capital. build it up even more, now it's for-property. then you're regulators. it's annoying to be regulated because the regulator might actually complain.your activities. so then you go to the stock market and that's when you make the big bucks. so it's a chain of events, a standard change of events. >> just have time for three people in line to use the microphone. >> good evening, mr. sinclair. for many years i have contributed through my annual work place campaign to a faith-based nonprofit organization who has opportunities international in chicago, and what i'm hearing

this evening. do you have any opinions about that organization and any guidelines for those of us who are faced with our annual charitable drive to see how to best assess the organizations are worthy of doing this microfinancing to help folks in poverty. thank you. >> okay. i don't know opportunity directly. i've worked in countries where they've been our competitors. they're one of the better institutions. i'm hard-pressed to think of any scandals they have been involved in, but i haven't had a thorough look. so, i'm not 100% sure but they're one of the best institutions. but i think you touched on a fundamental topic, which is citizens in the united states want to too something useful. they've got this -- they feel that maybe these entrepreneurs are out there they feel

powerless in d.c. or california and don't know what to do, so they trust their money to an institution. the problem is, when you're sitting near america you have no way of distinguishing between the good guys and the bad guys. yeah? even i, after ten years in the sector, living in these countries, i still get tricked by these institutions. i'm still learning the new methods that they're developing to pull the wool over our eyes. it's really, really difficult. so, what are tried to do in the book is not sort of say -- i mean, i do pinpoint a few individual players, the ones i work with and i have all the evidence and it's on the web site and anyone can verify it. i tried to instead make a rode -- road map so you know which questions to ask, which answers are not credible. who you need to be asking. what sort of taxes -- statistics are reliable and which are

useless. do not, do not underestimate the danger in investing in microfinance. it's almost entirely unregulated in practice. even when they say, it's regulated, even in the u.s. when they say, for example, calvert foundation is regulated bid the sec. yeah, maybe, but calvert gives its money to another institution, who gives its money to another institution, who make a bunch of loans and the delta in nigeria, and that isn't regulated. so you have too be really careful of really who is looking over your shoulder. when you make an investment microfinance, assume in 98% of the cases you're creek. assume there is no one looking after your interests. there's no one regulating this. it doesn't matter of its deutsche bank in wallstreet or an ngo in d.c., its makes no difference. the reality is no one is regulating them here in the united states and no one is

regulating them down there in the countries. it's investor beware. >> could you please comment on this -- what you described sounds very much like the typical money lender in india. do you know how this is impacted the money lending industry in india? i mean, this is an old tradition, and these interest rates and method of collection have been done forever. there's nothing new here. on the other hand they have the schemes in india which are really a co-op type of operation. nobody wants to use. so, what's going on? >> there's just this niche that all the money, all the evil money leners are now unemployed. it's ridiculous. actually the money-lehning been is doing just as well as it ever has done. it's difficult to get information on this because it is generally illegal and hidden

under the counter. when you're in a microfinancing institution, when you get a loan from a microfinance bank and you can't repay your loan at the end of the month, it's very convenient to go to the money lender and get a short-term interest rate. just give me the money for a few days. and there's actually a bit of a misnomer because you hear people saying, well, this bank might be really bad but it's cheaper than the money leners. there's a little subtlety which the microfinance sector doesn't go into about, which is if you have other microfinance institution charging you 150% a year and you have a money lener who is charging you 300% a year, which one is better? if you need money for a year and you can meet the repayment schedule, the microfinance bank is better. when you need that emergency money for a very short poured of time, one week, a few days until you sell your crops or until you sell your inventory, the money

lender, at a higher annual rate, but a shorter loan, to help you get over a little hurdle, is preferable and less paperwork than the microfinances information. and david reutimann did interesting research on the money lenders, although they're stated aprs, the annual interest rate is high but they're flexible. so if you get a loan from the money lender and you miss payment and they say, don't worry, pay me next week. there's a certain deof flexibility. when you annualize the actual cash flows of a money lener transportation sass, when you take into the timing of the cash flow, they're actually surprisingly cheap in many places in many situations, actually your best bet might be to go to a money lender than a microfinance institution, which is why we don't see queues of money lenders applying for jobs.

>> last question. >> yes. i'm from the caribbean. the french caribbean, and i have always been quite, i must say, highly skeptical about the microfinance business. it's spreading in the caribbean. have something effect. but you were asked what i thought was a foundational question. i didn't think to give an answer to it so i'm going to try to give the answer and see if you agree with and it then i have another thing that we need to talk about. you were asked why are -- why does microfinance came about in evens, right? i think it's not difficult to figure out in the larger scheme. right? it was an attempt to fundamentally monetaryize -- nonmonetaryize social relationships and break down solidarities between people that existed between that were going to be replaced with money with

catastrophic consequences for people at the bottom. i grew up in st. martin. i knew -- i knew when people would build houses in olden days, right? we're not talking with st. martin, which is extremely wealthy island. people would help each other put on roofs. you had a house built. i build my house, you come help me, et cetera. tourism came. you want to rebuild? you betber able to payor four roof, or else there will be no roof on the house. i don't care about you, you don't care about me. so the other issue i deal with and this is a biggest fromly. the bank in -- might be some interest for small sliver of talented business people in the

poor communities across the world. this can be helpful. for the majority of the people this is a big problem. when you break down the relationships and those solidarities evolved over time. and again, those things themselves are changing. so you need to change and be dynamic with them. but if you want to change in that way, it seems to me the best way to do it is to work within that community, figure out how those solidarities are evolving and changing over time and adapting to changing conditions, and then build in a type of microfinance or solidarity you want to build on those evolving foundations. else basically we have tremendous destructive force affecting the bottom two or three billion people. want it to hear what you think about that. >> i completely agree with everything this gentleman has just said. in if you look at another aspect of the microfinance hype, the

famous group lending, about how the women were guaranteed each other and if one doesn't repay they'll step in. this has terrible consequences for destroying friendships in small communities. because it's one thing to say, oh, i'm going to help you if you have a problem, but then when you actually -- you monetaryize the relationship, one person can't repay, creates huge resentment. it breaks up families, breaks up communities, it has untold damage. the only good thing that i can say in favor of this is that it seems face out -- phased out and they're going to more individual lending because the group lending model is not working and every year more and more countries are scrapping it. so it's good at least we can retain the friendship amongst the women in the groups. it's pretty sad when -- with

regards to this idea of the monetaryization of people and relationships and this kind of new liberal agenda, let's not forget -- i mean, we talk about microfinance as though it was something distinct from banking-but it's not. this is plain vanilla banking for poor people. and what we did was, there was these billion people, however many billion, who don't have bank accounts. let's start giving them bank conditions because we can make a profit and then bring them into the financial sector. but remember, critics, the first tool. what we were actually doing -- we're not providing financial services. we're bringing these people into the mainstream commercial sector. this is a channel. first of all we pump credit down through the channel, then we do savings, then insurance, and then the favorite example i've ever seen was in northwest argentina, where a loan officer

suddenly -- re realized, i'm seeing all these people. why don't i set up a dvd rental business, and he was saying, give me your 20's pes os and i'll bring bag next eek. this is bringing people into mainstream capital societies and it's we're opening a channel, we created the channel, and now we're going to start shoving credit, health insurance, life inchance, dvds, pizzas, whatever. it's now the time to bring the other billion into the capital ist society. this is possibly part of the agent maybe. [applause] >> we'd like to hear from you. tweet us your feedback, twitter.com/book tv.

>> local ohio author randolph ross is next on book tv. his book is american homicide. >> the homicide rates since really world war ii have correlated best with the answer to this question. do you trust the government to do the right thing and do you believe public officials are more honest? when we answered yes to those questions, like in the late 50s and early 60s,we don't kill each other. when we say, no, we don't trust the government, we don't trust public officials, the homicide rate goes higher. the homicide rate in the united states has been extraordinarily high really compared to the rest of the affluent world for over a century. compared to most other affluent nations, our homicide rate was between, say, four times to ten times or more the homicide rates in other societies. so, we've had a pretty high

rate, and it doesn't always sound very high when you hear it in the newspaper. for most of the 20th century, our homicide rates where around 9 to 10 per 100,000 persons per year. that sounds like small year. one year nine out oft 100,000 but you have to multiply that by your life expectancy because you're exposed to that rate your entire life. each year you resident got that chance. so when you look at that homicide rate that we had for most of the 20th century and you multiply it by life expectancy, if we maintained that rate, it would mean that roughly one out of every 160 children been in the united states today would blow murdered. works out to one out of every 460 white females -- for about one out of every 160 white males, about one out of every 110 nonwhite females and one out

of 27 nonwhite males. so when we think about those numbers, it's a costly thing. now, the homicide rate is lower than it was at its peek between the mid-60s and the easterly 18990s, but still running today between five to six per hundred how to. you're still talking one out of 210 children in america will be there up to be murdered. as a market of fact we think now the united states, say, right after the revolution, down to, say, the mexican war in the 1840s, probably had the lowest homicide rate in the western world, and if you factor in improvements in emergency care and emergency medicine, and think of how many of those people who were killed in that period would survive today, it was a extraordinarilily low rate, as low as the lowest

rateness the world today. so there have been periods when it's been very low, and you take a look today. african-americans are most likely to commit murder and to be murdered today. it wasn't like that in the past. in fact, right in through reconstruction through the mid-18th century, african-americans were among the least homicidal of all americans. so something changed in the late 19th century, early 20th 20th century to shift those proportions where whites -- european americans who had always been the most homicidal murderous, became slightly less murderous, and african-americans game more likely to kill. that doesn't mean that momentum african-american are less likely to be murdered. they were murdered at a high rate during reconstruction. compared to other americans but they were not the perpetrators. they were the victims, and african-americans really had a low homicide rate amongst themselves. if you take a look at your early

reconstruction in the south, african-americans were less likely to kill each other than the whites were. so, these patterns have changed dramatically overtime, which i look at it, there's hope, because it's not inevitable that the united states is murderous or that a particular group of americans is murderous, but figuring out why those rate goes up and, dodown, how that changes what we're trying to figure out. where we got out-of-bounds was beginning in the 1840s and 1850s when the country fell apart over the issue of slavery. and what we're beginning to see is what drives the homicide rate. it's hard to imagine that weather somebody rapes and murders a young woman they don't know, whether somebody gets in a deadly bar fight and kills theirbe friend, has to do with the political system, has to do with feelings and beliefs associated with government and society. when one of the things we really

see break down in the mid-19th mid-19th century, failure of nation building. our nation falls apart, and we're now thinking over 700,000 people were killed in that conflict, and during reconstruction, easily 100,000 murders or more coming out of that devastating event. when you have that kind of loss, that kind of hemorrhage, when your state breaks down and you have political instability and people don't trust government, they don't have the sense of fellow feel that goes beyond the families. encompasses a racial group or national group or religious group. the murder rate can skyrocket. it conclude to 10 to even 100 per 100,000. some places in the united states and the border land where the conflict is most intense, the murder rate is up over 100,000 per year and that's when we topped out. until then our homicide rate was lower than canada's and lower than englands and the canadians

always say you're so violent. until the state breakdown, our country was working pretty well. so it's the peak for african-american distrust for government came during the nixon administration, 1971 top 1974, and that whins -- when african-american homicide rates are higher and when did wide homicide rates peak? that is in the 1980s and he anger over welfare, vietnam, the humiliation of the hostage taking in iran and our inability to do something about it. pro-actively. that's when white trust in government went down lowest. and the white murder rate was the highest. at seven per 100,000, which is a huge -- just whites themselves. and then ronald reagan comes in and speaks to the concerns of those people, and what happens? the homicide rate plummets. the same thing happened when

franklin roosevelt came in during the depression and he won the first year of his administration. the second year people started to trust him and say, this is someone who cares. this government cares. i matter. you see the homicide rate drops rapidly for all americans. and of course you see that drop under reagan. so it's not a partisan thing. it has to do with how people feel generally about that person, whether they feel connected or included. another thing that's really how connected we feel with our fellow americans. the best correlation i found of the homicide rate from the colonial times, it's the percentage of new counties in any dead okayed named after a national hero. we name our counties after national heroes, george washington, and thomas jefferson, we don't kill each other, but when that number is low and when did it drop? it dropped in the 1840s and 1850s at people started to think we're not a nation

anymore. we're deeply divided, and that number went down and the murder rate weapon e went up. the same thing helped -- happened in the colonial period when, from -- this is when people -- the glorious revolution of the 1680s, but that increased trust in government in great britain, the reidentification, so the number of counties named after british heroes, the rate dropped. but in the crisis of the 60s and 70s -- that number dropped and we started to kill each other. so it's a way of saying something about solidarity. the other thing is hate speech. we're able to knock out the use of words now and these hate speech, and how intense these feelings were. the best you could -- if you mapped out the use of the n-word in the 19th century, and what percentage -- how often that was used in the books published, you map out the homicide rate

perfectly. it's scary. in other words, when that racial hatred comes with the crisis in the 1840s and 1850s, the homicide rate goes up, peaks during the civil war, goes down as reconstruction ends and then in the 18 90s it goes back up again, and it works the other way. the other place that the antiabolitionists used was the slave power. this is our -- these are not a our fellow americans, they're tyrants. they brutalize their fellow human beings. we want nothing to do with them. when that speech -- that anger towards the white southerner comes in, you'll see it maps out the murder rate, too, so we're trying to look at ways to measure these kinds of emotions. but political instability, the breakdown of national cohesion, seems to be what we're looking

at. if you asking -- it's something my friends in europe and canada ask me. you americans really hate your government. we never heard so much hatred of government and i'm not talking about that in a partisan way. people get upset in this country and it goes back to the distrust and gets amplified in the civil wariments we're still fighting the civil war you. look at the electioner to map of bush versus gore. its the flip of the map of lincoln verse everybody owls. the political divisions are there and the feelings are still there, and so that's why we think as historians, as social scientists or many of us are beginning to think, this is how we got into this. and i guess the thing i would say, too would help -- both liberalism and conservativism, in my opinion, contributed very importantly to the process. i think their ideas in both of those ideologies that have been very constructive, but the their

riz of violence don't work. it's not about deterrence. it's not about the economy working well. sometimes in the great depression, the homicide rate goes down. the 1960s, it goes up. can't be the economy. we look at religion. we are the most church-going people of any affluent nation and we have the highest percentage of people that believe in god. and still we kill each other. how can that be? so, our faith doesn't even -- our extraordinary faith doesn't solve this problem. and if you think the people are during murders don't think themselves as god fearing, they do. there are god fearing people who think that person decides to die. you hear people say, god told me. got what he deserved. that doesn't work. when you have that anger there, people use their religion the

wrong way. and so i think we have to get away from the idea that our ideaols -- ideologies are going to have the answer of the homicide problem. we have to look elsewhere and that's what we're trying to do. >> and now more from book tv's recent visit to columbus, the capital city of ohio. >> one of the most unique in the country, in that it's the one collection that is totally dedicated to collecting the work of its states authors or information about ohio's people and the state. we were started in 1929 by the first latey of the state, mar that kenney cooper, whose photograph is here on our wall, and she felt that ohio -- well, everyone paid more attention to really sports, even at that time

than they did recognizing their writers, musicians and artists. especially writers, who work so hard, get so little attention, and really contribute so much to our work they and leave such a great legacy. people say the history of ohio? the cultural history as reflected in the poetry, the literature, childrens books, we weres, romances, science fiction, as well as phonics. so it's a very eclectic collection. ohio has had thousands of great authors. some may be familiar to people and they don't realize they're from ohio, and others say i would never manage 0 relationship of langston hughes to ohio. most people see langston hughes as from chicago or new york.

but langston hughes did move to ohio when he was in high school. and finished four years of high school here in cleveland, actually, and one of the letters he wrote talks about him going to school and graduating from central high school in cleveland and that he came back to ohio and he wrote and actually he wrote troubled island while he was staying in a hotel in cleveland. so he considered himself an ohio writer, and when the postage stamp that was dedicated to him a few years ago was launched. the national launch was at -- in cleveland. so the ohio launch was here ohioland. ohioland has a wonderful women's history and suffrage collect, one of those that actuall r