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Kiva Nerdfighters:

In which John discusses job creation, small businesses, how the work of bankers can actually decrease worldsuck (contrary to popular belief), and how credit crunches affect economies around the world. I also discuss the microfinance web site, which allows all of us to make loans to entrepreneurs in the developing world.

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A Bunny
( - -)
((') (')
Good morning Hank, it's Monday. Today I'm going to talk about credit crunches, why they're so evil and how you, and I, and all of nerdfighteria could dramatically decrease world suck if we just became better bankers.

I'm so bad at banking! Did I say 'baking' or 'banking'? I don't know, I'm bad at both.

OK, so Hank, all the numbers in this example are going to be made up to make the math easier for me because I'm bad at math, but say I have a fantastic business idea. Like, say I have a business idea to make posters that say 'Keep Calm and DFTBA'.

It's important to note that this idea, if it's a good idea, isn't just good for me. Like, I don't want to brag or anything, but if my business idea is successful, then a number of people's jobs will kind of, partly, depend on it.

Right, there's the nerdfighter who made the poster design, but there's also the people who make the poster paper, the people who print posters, the people who distribute and ship posters... (That's not just true of posters, by the way, it's true of almost every good and service in the economy.)

So I got a great idea, but I have a problem, which is that I have a baby, and I have to take all the money that I make and turn it into food, which then he turns into poop. Essentially all my money is getting pooped out, so how am I going to get my posters?

I'm going to go to a place with money, specifically, a bank, and I'm gonna be like, "Listen, I want a hundred dollars so I can print these posters. They're gonna be a big hit, everybody's gonna love 'em." Then the bank'll take a hard look at me, appreciate my rugged good looks, and agree with me that people like to be reminded to keep calm and not forget to be awesome, and they'll be like, "Alright, here's a hundred bucks."

So I get my posters printed, I sell them, say I have two hundred dollars, then I have to give a hundred dollars plus interest back to the bank, then I've gotta pay my baby to poop. Then I gotta pay the rent, and buy a twenty-four dollar iPhone case, and lo and behold, I don't have another hundred dollars to spend on posters.

So I go back to the bank, and I'm like, "Hey, it's me, the ruggedly handsome guy with the poster idea. I need another hundred bucks so I can sell more posters." And they're like, "So-rry." And I'm like, "What? It's me! Do you not remember the poster? Do I need to unbutton a button for you?" And they're like, "No, sorry, it's just there's a credit crunch, we're not really loaning money right now."

Why do banks do this? Because in times of economic panic, they have to hold on to a much larger percentage of their deposits in order to prevent, like, bank runs. So essentially, we all sit on a big pile of capital that we could be investing in good ideas, like my poster company that would create jobs.

Hank, I'm pretty worried there's a credit crunch coming, but I am not as worried about you, or me, or the posters as I am about the hundreds of millions of people who have emerged from poverty in the last forty years.

Because entrepreneurs in the developing world depend much more than we do on low interest loans to buy the things that they need to make the things that they sell. To buy spare parts for taxis, or animals for agriculture, or cosmetics that they sell in local stores, or food for neighborhood restaurants...

Which brings me to, the website that allows you, or me, or anyone to be a banker for entrepreneurs in the developing world. You pick the entrepreneurs you wanna work with, from around the world, and then you loan them money, and there is a 98.5% chance that they pay you back. Whereupon you can re-loan that money forever, or take it out at some point, if you want.

And, admittedly, you don't make any interest on this deal, but as you may have noticed, you also don't make any interest in regular banking these days. Anyway, Hank, I started loaning to Kiva in 2007, I've had a one hundred percent payback rate, but I logged on yesterday to find that I had nine hundred and thirteen dollars that I wasn't loaning to anyone.

In short, Hank, I had become that scared banker who refuses to invest in good ideas. So I re-loaned my money to a bunch of entrepreneurs, I also joined the Kiva Nerdfighters group (link in the dooblydoo), which is pretty amazing, like, if you scroll down there, you'll see that we've loaned more than thirty-three thousand dollars. But I think we can do even better, so Hank, nerdfighters, I encourage you to check out the Nerdfighter group, you can join just by clicking 'Join'. You can loan as little as twenty-five dollars, like I said before, they pay you back 98.5 percent of the time, but the most exciting thing is that you get to be an awesome banker. There's a phrase you don't hear much anymore. You get to facilitate sustainable economic growth in the developing world.

So yeah, Hank, bankers can reduce world suck. And we can be bankers! The truth resists simplicity. Don't forget to be awesome, I'll see you on Wednesday.

Oh, and P.S., those posters, not just a rhetorical gambit, they're actually for sale. So if you want a poster, or if you want to indirectly purchase some baby poop, head on over to