The Grameen Thing: Just Another Bubble

The hysteria about the glories of microcredit must have been another illusion created by the economic boom, but somehow, there for a while, it was hard to talk sense into anyone on this issue. Somehow, all the world came to believe that the key to lifting people out of poverty was to grant everyone loans that they then had to service out of some income stream that they didn't have.

This strategy of loans-to-the-poor was supposed to be the magic means by which people could bypass the old-fashioned stage of saving, investing, exchanging, and producing. Even the classical liberals believed it, as shown in the breathless tributes to Professor Yunus after he received yet another prize for his Midas-touch act.

As the author of two of the only pieces online attacking microlending, I've been dealing with incredulous emails on this subject for a long time. Better material has been popping up in the last year, in other a few other places.

And yet today, even Buttonwood is beginning to see the distinction between debt and wealth. And the Boston Globe is now debunking the Grameen Myth.

Reporting on two new studies, the journalist reports:

This article originally appeared on Mises.org.