Our Rio de Janeiro correspondent, MacMargolis, delves into a new microfinance study and wonders whether the much-lauded sector is about as efficacious as a subprime CDO and as bubbly as a Pets.com equity option. --BWS

The international financial crisis has destroyed many certainties,but one of the touted survivors is the old saw that small is beautiful.Sure, no one is flogging mansions to paupers anymore. But microfinance is still flourishing, and even expanding. Ever since Bangladeshi economist Muhammad Yunus started handing out small loans to the poor in1974, the idea that a little credit can help peasants and simple villagers climb out of poverty has swept the map. Civic groups, the World Bank, even commercial lenders have gotten into the act, capturing millions of barefoot clients across the developing world. Today microfinance is a global growth industry. It reaped Yunus the Nobel prize. Even the developed world is catching on. Grameen Bank, the Bangladesh-based microlender Yunus founded, opened a branch in Queens,New York, last year and plans to unveil another in Omaha, Nebraska.Take that, Citicorp.

But hold that confetti...

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When Congress included a “Buy American” clause in the $787 billion stimulus package, mandating the use of U.S.-made iron and steel in stimulus-funded projects, critics decried it as dangerous protectionism. China in particular was displeased; its official news agency likened the clause to “poison.” Turns out two can play the protectionist game. Beijing’s recent decision to stick a “buy Chinese” clause into its own $586 billion stimulus package now has much of the West crying foul.

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