It may seem an odd combination to interview both Nobel Peace Prize winner Muhammad Yunus and former junk bond trader Michael Milken on the same Charlie Rose show, to talk about the financial crisis, but that is exactly what happened... what is said makes sense... watch here:
Prof. Yunus discusses microcredit and Social Business. Milken reflects back on his days of leveraging, which now seem extremely conservative compared to what has been going on over the past decade. Milken also says that what made the US different than other countries in the past was democracy and education. Now the US has fallen behind in education. We need to look at other countries now for examples on how to move forward and educate our children.
What is missing in the discussions of the financial crisis, banking and lending are the trust and human elements. Prof. Yunus' microcredit programs operate without collateral and without lawyers. The financial crisis, specifically the sub-prime lending part in this, has proven that the collateral behind lending does not guarantee the repayment rate. Prof Yunus' microcredit repayment rate reaches 99%, with no collateral. His borrowers deal in a more real concrete economy and real businesses created by microloans, which help local communities. Traditionally, the overall financial and economic models leave out the poor, thus Prof. Yunus says these are incomplete models.
Watch the video clip all the way through as Prof. Yunus speaks about Social Businesses, no dividend companies created by investing in humans, with results not simply measured in profits, but by the benefits provided to human beings, such as better health via social businesses focused on health care. Milken and his family foundation are involved in this part of the future of health care as well.
Milken's experience "at the top" and Yunus' experience "at the bottom" come together to look at how the future of the economy, and how to empower individuals. Milken says something very interesting, which is that even if we have lost capital, but still have our health and knowledge, we can still create and rebuild the economy, and add with that Yunus' desire to provide loans to all who desire to create real businesses and a real economy which factors in the human element, we can still be optimistic about out future. In fact, perhaps the silver lining in this crisis is that we will start focusing on the human part of how we will build a more sustainable future.
Other sites where Prof. Yunus addresses the Financial Crisis:
From Business Week:
Agence France Press in English
German online version of der Spiegel in English