Lawyers of the USA

Broke, USA: From Pawnshops to Poverty, Inc.How the Working Poor Became Big Business

Description

For most people, the Great Crash of 2008 has meant troubling times. Not so for those in the flourishing poverty industry, for whom the economic woes spell an opportunity to expand and grow. These mercenary entrepreneurs have taken advantage of an era of deregulation to devise high-priced products to sell to the credit-hungry working poor, including the instant tax refund and the payday loan. In the process they've created an industry larger than the casino business and have proved that pawnbrokers and check cashers, if they dream big enough, can grow very rich off those with thin wallets.

Broke, USA is Gary Rivlin's riveting report from the economic fringes. From the annual meeting of the national check cashers association in Las Vegas to a tour of the foreclosure-riddled neighborhoods of Dayton, Ohio, here is a subprime Fast Food Nation featuring an unforgettable cast of characters and memorable scenes. Rivlin profiles players like a former small-town Tennessee debt collector whose business offering cash advances to the working poor has earned him a net worth in the hundreds of millions, and legendary Wall Street dealmaker Sandy Weill, who rode a subprime loan business into control of the nation's largest bank. Rivlin parallels their stories with the tale of those committed souls fighting back against the major corporations, chain franchises, and newly hatched enterprises that fleece the country's hardworking waitresses, warehouse workers, and mall clerks.

Timely, shocking, and powerful, Broke, USA offers a much-needed look at why our country is in a financial mess and gives a voice to the millions of ordinary Americans left devastated in the wake of the economic collapse.

Reviews

Rating: 5 / 5
Date: 2010-08-21
Summary: "Important Book for All of America"

Author Gary Rivlin has done a masterful job informing the reader about the seemy underbelly of American financial institutions, the so called "Poverty, Inc." companies that prey on those not savvy or interested enough in reading the fine print. And there are many, many millions of folks being caught by these scammers.

A part of me had some admiration, just a bit, for the sheer ballsyness of people like Allen Jones, worth $200 m but still crying about how hard his life is while at the same time looking for the next pot of gold. It's guys like this, partly, that helped build this country. But my admiration for him and the others does not mean that hard core anti-usury laws should not be passed by Congress. These stores would still be in existance making payday loans should restrictions by placed on the interest rates, just not to the mind numbing number currently.

A great book and a good read. Highly recommended for all.

---

Rating: 3 / 5
Date: 2010-08-20
Summary: "Light on substance, heavy on character development"

I believe that the working poor pay a penalty at every turn for things that those even 'one rung up' don't have to deal with: money card fees, onerous loans from used car dealers, expensive laundromats for lack of a washing machine. All of which makes it harder to move up that next rung.

However, you won't learn about these things from this book. In the acknowledgements, the author credits the beginnings of the book to a conversation on "...the pioneers of sub-prime" which should be modified slightly to 'The Pioneers of Payday Loans' as a more accurate title. Chapter after chapter is devoted to describing perhaps a total of four characters: where they grew up, what sports they played in high school, what their fathers did, what car they drive, etc., etc.

Gary Rivlin is a good writer and apparently an excellent interviewer. I just wish he would have devoted more time to researching and writing about 'How the Working Poor Became Big Business".

---

Rating: 5 / 5
Date: 2010-08-12
Summary: "Everyone Should Read This Book"

In the worst neighborhoods in America, you always find the following businesses; pawn shop, check casher, payday loan, tax-return advance lender, bail bondsman, liquer store, and funeral parlor. In the better neighborhoods, these businesses are a low-rent joke. If you look at a William Hogarth painting, you see the same thing; in the worst neighborhood, the best-kept businesses are pawn shops and funeral parlors, while in the better neighborhoods, the pawn shop and funeral parlor are run-down.

Poverty is a big business in the USA, and I don't mean charity. Payday loans are legal, but they take advantage of people who either have no choice or don't understand money. But the victims here are not without fault; one interview subject had a low-paying job and overspent, and one couple had children when they were not ready for the responsibility. I personally know people who have one child after another and can't afford to feed the children. I know others who took out huge loans to buy huge homes, even though their monthly income was less than the mortgage payment.

The interesting thing about the book is that the "villains" are, in some ways, better people than the ones they rip off. Take for instance an Ethiopian immigrant workaholic who founded a tax-return advance loan service. He set up the whole business on his own, hired the CPA's, found a bank to underwrite the company, and manages it successfully. Sure, he's taking advantage of the poor, but is the fault on him? After all, he's the one who's working like a horse and putting off having children.

Bottom line: it's the responsibility of the individual to live within their means. And delaying parenthood for a while doesn't hurt either.

---

Rating: 4 / 5
Date: 2010-08-10
Summary: "Let the reader decide"

This reporting doesn't burn shoe leather so much as it burns through boarding passes. Rivlin visits those across the country with an interest in making money off the poor, yet even with his sharp eye for personal details what sets this book apart is the way it doesn't demonize or beatify its figures, but lets the reader make his or her own decisions about them.

---

Rating: 5 / 5
Date: 2010-07-28
Summary: "Up next: Lending children milk money against their next allowance"

Several years ago a young coworker of mine mentioned wanting to go into business for herself. Because since the 1980s wages had declined for all but the most affluent Americans, I said, "I guess I'd want my product or service aimed at the wealthy, as they are the only people who can afford anything these days."

As the book BROKE, U.S.A.: FROM PAWNSHOPS TO POVERTY, INC. - HOW THE WORKING POOR BECAME BIG BUSINESS tells it, others thought differently. In both statistics and personal stories, BROKE, U.S.A. tells of 361% A.P.R. and other traps companies such as Wells Fargo set for the impoverished with sub-prime mortgages, payday loans, and tax refund anticipation loans, among other get-poorer-quick schemes. Even in America people who work for a living can still be poor, predatory lending the latest symptom of that disease.

BROKE, U.S.A. makes me think of the "profits" excuse people threw at Michael Moore after his documentary ROGER AND ME called out General Motors for laying off employees despite having record automobile sales. As Moore reasoned, one can also earn profits in the slavery business, so does that make forcing people to work for free acceptable?

Not long after our conversation about what kind of business to pursue, my young colleague quit and moved out of state. Maybe I should web search her name and "check cashing."

Painstaking in detail, BROKE, U.S.A. presents predatory lenders preying on the poor as no different than the post-Civil War carpetbaggers who exploited the devastated South. Read BROKE, U.S.A..