Aug. 14, 2010
BOOK REVIEW: 'Broke, USA'
Examines Dark Underbelly of Nation's Financial System Serving -- and Abusing -- Working Poor
Reviewed By David M. Kinchen
For most Americans, the Great Crash of 2008 -- still continuing in the latter half of 2010 as home foreclosures mount up and the unemployment rate rises -- 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 financial deregulation to devise high-priced products to sell to the credit-hungry working poorr, products that include the instant tax refund, really an extraordinary high interest loan, and the equally usurious payday loan.
In the process they've created an industry larger than the casino business and have demonstrated that pawnbrokers and check cashers, if they dream big enough, can grow very rich off those with thin wallets.
Veteran reporter Gary Rivlin examines what might be called the Poverty Industrial Complex in "Broke, USA" (HarperBusiness, 368 pages, $26.99). He travels the nation describing an industry that prides itself on being the safety net for working poor who are often un-banked or underbanked, relying on paycheck loans to pay the rent, fix the clunker and make it until another payday. From the annual meeting of the national check cashers association in Las Vegas to a tour of the foreclosure-riddled neighborhoods of Dayton, Ohio, Rivlin shows us a subprime Fast Food Financial Nation that features 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 people like Bill Faith and Jim McCarthy in Dayton and William J. Brennan in Atlanta fighting back against the major corporations, chain franchises, and newly hatched enterprises that fleece the country's hardworking waitresses, warehouse workers, and mall clerks. And he visits and interviews victims of this industry that many Americans are unaware of.
His book shows a different kind of class system, with the fortunate having bank accounts, direct deposit pensions and Social Security and access to reasonably priced loans. The underbanked or un-banked unfortunate ones go to H&R Block or Jackson Hewitt for their income taxes and an instant "refund" with a triple-digit interest rate. Or they go to Advance America for a payday loan, or Rent-A-Center where they rent furniture or a TV for a gigantic multiple of what it would cost if they had decent credit scores.
I wanted to see if the companies Rivlin were present in my current home town, a 12,000-population county seat in coastal Texas. Sure enough, I found an Advance America and a Jackson Hewitt in the same shopping center where I shop at H.E.B. for groceries. Across Highway 35 there's a Rent-A-Center that not only rents furniture, but also makes loans and provides banking services to its underbanked clientele. I took pictures -- which accompany this review -- of these outposts of the poverty financial industry.
"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. And it offers a look at what the future looks like for those who might be the next to be laid off or downsized.
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BOOK REVIEW: 'Broke, USA'
Examines Dark Underbelly of Nation's Financial System Serving -- and Abusing -- Working Poor
Reviewed By David M. Kinchen
For most Americans, the Great Crash of 2008 -- still continuing in the latter half of 2010 as home foreclosures mount up and the unemployment rate rises -- 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 financial deregulation to devise high-priced products to sell to the credit-hungry working poorr, products that include the instant tax refund, really an extraordinary high interest loan, and the equally usurious payday loan.
In the process they've created an industry larger than the casino business and have demonstrated that pawnbrokers and check cashers, if they dream big enough, can grow very rich off those with thin wallets.
Veteran reporter Gary Rivlin examines what might be called the Poverty Industrial Complex in "Broke, USA" (HarperBusiness, 368 pages, $26.99). He travels the nation describing an industry that prides itself on being the safety net for working poor who are often un-banked or underbanked, relying on paycheck loans to pay the rent, fix the clunker and make it until another payday. From the annual meeting of the national check cashers association in Las Vegas to a tour of the foreclosure-riddled neighborhoods of Dayton, Ohio, Rivlin shows us a subprime Fast Food Financial Nation that features 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 people like Bill Faith and Jim McCarthy in Dayton and William J. Brennan in Atlanta fighting back against the major corporations, chain franchises, and newly hatched enterprises that fleece the country's hardworking waitresses, warehouse workers, and mall clerks. And he visits and interviews victims of this industry that many Americans are unaware of.
His book shows a different kind of class system, with the fortunate having bank accounts, direct deposit pensions and Social Security and access to reasonably priced loans. The underbanked or un-banked unfortunate ones go to H&R Block or Jackson Hewitt for their income taxes and an instant "refund" with a triple-digit interest rate. Or they go to Advance America for a payday loan, or Rent-A-Center where they rent furniture or a TV for a gigantic multiple of what it would cost if they had decent credit scores.
I wanted to see if the companies Rivlin were present in my current home town, a 12,000-population county seat in coastal Texas. Sure enough, I found an Advance America and a Jackson Hewitt in the same shopping center where I shop at H.E.B. for groceries. Across Highway 35 there's a Rent-A-Center that not only rents furniture, but also makes loans and provides banking services to its underbanked clientele. I took pictures -- which accompany this review -- of these outposts of the poverty financial industry.
"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. And it offers a look at what the future looks like for those who might be the next to be laid off or downsized.
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Make HNN Your Homepage (IE Users Only)
