studied economics at Vanderbilt University before going home to help his people. I arranged to meet him for breakfast in Washington one morning, and he explained how his “microcredit” program worked. Village women who had skills and a reputation for honesty but no assets were organized in teams. When the first borrower repaid her small loan, the next one in line got hers, and so on. When I first met Yunus, the Grameen Bank already had made hundreds of thousands of loans, with a repayment rate higher than that for commercial lenders in Bangladesh. By 2002, Grameen had made them to more than 2.4 million people, 95 percent of them poor women.
If the idea worked in Chicago, I thought it would work in economically distressed areas in rural Arkansas. As Yunus said in an interview, “Anywhere anybody is rejected by the banking system, you have room for a Grameen- type program.” We set up the Southern Development Bank Corporation in Arkadelphia. The Development Finance Authority put up some of the initial money, but most of it came from corporations that Hillary and I asked to invest in it.
When I became President, I secured congressional approval for a national loan program modeled on the Grameen Bank, and featured some of our success stories at a White House event. The U.S. Agency for International Development also funded two million micro-credit loans a year in poor villages in Africa, Latin America, and East Asia. In 1999, when I went to South Asia, I visited Muhammad Yunus and some of the people he’d set up in business, including women who’d used the loans to buy cell phones, which they charged villagers to use to call their relatives and friends in America and Europe. Muhammad Yunus should have been awarded the Nobel Prize in Economics years ago. My other major interest was welfare reform. I asked the legislature to require recipients with children three years old or over to sign a contract committing themselves to a course of independence, through literacy, job training, and work. In February, I went to Washington with several other governors to testify before the House Ways and Means Committee on welfare prevention and reforms. We asked Congress to give us the tools to “promote work, not welfare; independence, not dependence.” We argued that more should be done to keep people off welfare in the first place, by reducing adult illiteracy, teen pregnancy, the school dropout rate, and alcohol and drug abuse. On welfare reform, we advocated a binding contract between the recipient and the government, setting out the rights and responsibilities of both parties. Recipients would commit to strive for independence in return for the benefits, and the government would commit to help them, with education and training, medical care, child care, and job placement. We also asked that all welfare recipients with children age three or older be required to participate in a work program designed by the states, that each welfare recipient have a caseworker committed to a successful transition to self-sufficiency, that efforts to collect child-support payments be intensified, and that a new formula for cash assistance be established consistent with each state’s cost of living. Federal law allowed states to set monthly benefits wherever they chose as long as they weren’t lower than they had been in the early seventies, and they were all over the place. I had spent enough time talking to welfare recipients and caseworkers in Arkansas to know that the vast majority of them wanted to work and support their families. But they faced formidable barriers, beyond the obvious ones of low skills, lack of work experience, and inability to pay for child care. Many of the people I met had no cars or access to public transportation. If they took a low-wage job, they would lose food stamps and medical coverage under Medicaid. Finally, many of them just didn’t believe they could make it in the world of work and had no idea where to begin.
At one of our governors’ meetings in Washington, along with my welfare reform co-chair, Governor Mike Castle of Delaware, I organized a meeting for other governors on welfare reform. I brought two women from Arkansas who had left welfare for work to testify. One young woman from Pine Bluff had never been on an airplane or an escalator before the trip. She was restrained but convincing about the potential of poor people to support themselves and their children. The other witness was in her mid to late thirties. Her name was Lillie Hardin, and she had recently found work as a cook. I asked her if she thought able-bodied people on welfare should be forced to take jobs if they were available. “I sure do,”
she answered. “Otherwise we’ll just lay around watching the soaps all day.” Then I asked Lillie what was the best thing about being off welfare. Without hesitation, she replied, “When my boy goes to school and they ask him, ‘What does your mama do for a living?’ he can give an answer.” It was the best argument I’ve ever heard for welfare reform. After the hearing, the governors treated her like a rock star. When I tackled welfare reform as President, I was always somewhat amused to hear some members of the press characterize it as a Republican issue, as if valuing work was something only conservatives did. By 1996, when Congress passed a bill I could sign, I had been working on welfare reform for more than fifteen years. But I didn’t consider it a Democratic issue. Or even a governors’ issue. Welfare reform was about Lillie Hardin and her boy.
TWENTY-FOUR
Thanks to the four-year term, the dedication and ability of my staff and cabinet, a good working relationship with the legislature, and the strength of my political organization, I also had the space to move into the national political arena.
Because of the visibility I got from my work on education, economics, and welfare reform, and my chairmanships of the National Governors Association and the Education Commission of the States, I received a lot of invitations to speak out of state in 1987. I accepted more than two dozen of them, in fifteen states. While only four were Democratic Party events, they all served to broaden my contacts and to heighten speculation that I might enter the presidential race.
Although I was only forty in the spring of 1987, I was interested in making the race, for three reasons. First, by historical standards the Democrats had an excellent chance to recapture the White House. It seemed clear that Vice President Bush would be the nominee of the Republican Party, and up until then only vice president to win the presidency directly from that office had been Martin Van Buren, in 1836, who succeeded Andrew Jackson in the last election in which there was no effective opposition to the Democratic Party. Second, I felt very strongly that the country had to change direction. Our growth was fueled primarily by big increases in defense spending and large tax cuts that disproportionately benefited the wealthiest Americans and drove up the deficit. The big deficits led to high interest rates, as the government competed with private borrowers for money, and that in turn drove up the value of the dollar, making imports cheaper and American exports more expensive. At a time when Americans were beginning to improve their productivity and competitive position, we were still losing manufacturing jobs and farms. Moreover, because of the budget deficit, we weren’t investing enough in the education, training, and research required to maintain high wages and low unemployment in the global economy. That’s why 40 percent of the American people had suffered a decline in real income since the mid-1970s. The third reason I was seriously considering entering the race is that I thought I understood what was happening and could explain it to the American people. Also, because I had a strong record on crime, welfare reform, accountability in education, and fiscal responsibility, I didn’t think the Republicans could paint me as an ultra-liberal Democrat who didn’t embrace mainstream values and who thought there was a government program for every problem. I was convinced that if we could escape the “alien” box the Republicans had put us in since 1968, except for President Carter’s success in 1976, we could win the White House again.
It was a tall order, because it’s not easy to get people to change their political frame of reference, but I thought I might be able to do it. So did several of my fellow governors. When I went to the Indianapolis 500 race in the spring, I ran into Governor Bob Kerrey of Nebraska. I liked Bob a lot and thought he, too, would be a good presidential candidate. He had won the Medal of Honor in Vietnam and, like me, was a fiscal conservative and social progressive who had been elected in a state far more Republican than Arkansas. To my surprise, Bob encouraged me to run and said he’d be my chairman in the midwestern states if I did.
There was one obstacle at home to my running for President: Dale Bumpers was seriously considering it. I had been encouraging him to run since late 1974. He almost did in 1984, and he had an excellent chance to win this time. He had served in the marines in World War II, had been a great governor, and was the best speaker in the Senate. I knew that Dale would be a good President and that he would have a better chance to win than I would. I would have been happy to support him. I wanted our side to win and change the direction of the country.
On March 20, as I was jogging down Main Street in Little Rock, a local reporter chased me down to say that Senator Bumpers had just issued a statement saying he wouldn’t run for President. He just didn’t want to do it. A few weeks earlier, Governor Mario Cuomo of New York had made the same decision. I told Hillary and Betsey I wanted to take a serious look at the race.
