Funder-in-Chief and a Culture of Distrust

Income inequality has increased in over the past 20 years around the world. According to Oxfam, of all G-20 countries, only Korea, Mexico, Brazil and Argentina, proved to reduce the widening gap [1].

In our assigned reading, To Beat Back Poverty Pay the Poor, Brazil and Mexico can attribute decreased income gaps and poverty alleviation to a single conditional cash transfer program. Conditional cash transfer programs, like Brazil's Bolsa Familia and Mexico's Opportunidades, "give regular payments to poor families in the form of cash or electronic transfers into their bank accounts, if they meet certain requirements"[2].

Besides closing income gaps, these programs have had significant education and public health benefits. Opportunidades covers 5.6m Mexican's and has led to a 42% increase in rural middle-school education and an 85% increase in rural high-school education. Likewise, in Brazil, Bolsa Familia covers 50m Brazilian's and has led to an increase in rural school attendance, especially by older girls, and increased child weight, use of vaccinations, and use of pre-natal care [2].

What amazes me and would probably amaze other Americans, especially those working in politics or welfare, is the effectiveness of the programs and their lack of serious government regulation. For example, the Bolsa Familia gives extreme poverty stricken families $40 per month stipulation free. Meanwhile, the U.S. welfare system strictly regulates where and how welfare can be used through health care vouchers, electronic bank cards for food, subsidized rent, tax discounts, job training and substance abuse programs. These regulations are then even further regulated, since not all institutions accept these vouchers as proper means of payment, and direct cash is rarely disseminated through the U.S. welfare system [3].

The social innovation course has had one main call to action: in the capitalist system, to promote equality, we must dramatically increase the social impact for each dollar we invest in social programs. In my opinion, the large size and lack of regulation characterized in Brazil and Mexico's cash transfer programs has taken a giant step towards that direction.

However, many American elite and middle-class residents favor regulated systems versus direct cash, since they believe welfare will bring laziness and do not trust the poor to use tax money responsibly. Interestingly, despite the significant positive outcomes of the cash transfer programs, those from Mexico and Brazil who commented on the article, exclaimed elite and middle-class residents also believe these transfers will result in laziness.

Therefore, for such success to exist in the U.S., the elite, middle-class, and policy makers need to begin trusting its non-profit organizations and poor to make the best decisions for themselves. They must also remember, that under the world's capitalist economic system, with adequate education, that result is inevitable.

If we keep this culture of distrust, how will we have a government and President that acts as "funder-in-chief" instead of "regulator-in-chief," a change most of the articles advocate for.  Furthermore, if statistics and distinguished think-tanks advocate for greater government trust and with Brazil and Mexico's as case studies for success, what else is necessary to prompt a national cultural shift that actually trusts poor families and the non-profit organizations that support them?