About book Broke, USA: From Pawnshops To Poverty, Inc. - How The Working Poor Became Big Business (2010)
This was well done. I like the way the book presented the situation with financial businesses in impoverished areas. I appreciated the unbiased nature of the payday loan, furniture rental scams, and the sub-prime mortgages. The author did a great job with the fine balance between individual responsibility and being taking advantage of. I found it interesting that there is a lot of truth to why these payday places existed in the first place and there is a need for small short term loans. In Broke USA we do not see any heroes nor do we see any villains. The author has done solid research.I listed to this book on audio and the reader was just fabulous. He kept the story interesting but without taking away the reporting if that makes sense. Given the plethora of books with lofty top-down stories about the 2007 - 2008 financial crash, this book comes as a welcome reality check. It's a ripping yarn of greed, injustice, debt slavery, white knights and dark knaves... without, so far, a happy ending. Rather than focusing on the glamorous boardroom battles of the 0.001%, it dwells on the financial affairs of the bottom 75% - those who meet some or all of the following criteria: wages have fallen;make less than the median income;have poor credit or no established credit;live paycheck-to-paycheck or have fixed incomes; stuck in depressed communities; burdened with medical expenses and school loans; unemployed, erratically employed or underemployed; lack decent education and marketable skills;have unfavorable skin colors, gender, age, disabilities, etc... If you're wondering why the Obama administration is choosing to spend its scarce political capital on a Consumer Financial Protection Agency, most of your answers lie within these pages. There are some manipulative anecdotes, and the patterns of exploitation in each specialized loan industry (payday lending, pawnshops, tax refund loans, sub-prime mortgages, etc.) get repetitive, but Rivlin draws a clear picture of a financial system that exists to help only those who don't need more money.A $500 payday loan or emergency second mortgage, taken by a family with no other means of securing credit, multiplies into tens of thousands over a few years based on usurious interest and falsely assessed fees, resulting in a foreclosure that (in a rising real estate market) could be quickly turned around for even greater profit. Shady store-front lenders, as parts of large national franchises, wage legal and PR wars on community organizations and successful non-profit lenders to block restrictive legislation. The franchised store-front lending chains are so profitable that they get bought by the big national banks, who previously couldn't be bothered to maintain branches in depressed communities. The banks, in turn, enlarge the "innovative" practices of these small lenders, and work to distort the legislative and regulatory processes even further. The big national banks start selling the collateralized debt from the store fronts... which goes sour when workers lose jobs in financially starved communities, and foreclosed homes can't be sold profitably any more. And the next thing you know, it's the fault of those irresponsible poor people [and the middle class, when the predators discovered that the suburbanites could be exploited just as easily in the absence of any laws to the contrary]. It will become much harder to give credence (let alone moral suasion) to those who blame families facing home foreclosures. Rivlin builds the historical narrative from the Reagan era onward to the present, laying the foundations for blame along the way. It's going to take a long time, a fundamental rethinking of American small finance (third-world microloans, anyone?) and the removal of the responsible political factions to fix.
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Just a sad, sad read. So much greed and evil.
—bayfree
