The Poverty Business...Link - OUTRAGEOUS

[debbierlus]

http://www.businessweek.com/magazine/content/07_21/b4035001.htm

This article does not even begin to get to the depth of the entrapment of the cycle of poverty. How the corporations enslave the poorest people charging them ridiculous interest rates & fees for every day late & dollar short...Loan sharks...That is ALL they are - instead of giving a break to those who need it, they rape them.

This is the line that pisses me off the most in the article:

"Nobody, poor or rich, is compelled to pay a high price for a used car, a credit card, or anything else. Some see the debate ending there. "The only feasible way to run a capitalist society is to allow companies to maximize their profits," says Tyler Cowen, an economist at George Mason University in Fairfax, Va. "That will sometimes include allowing them to sell things to people that will sometimes make them worse off."


Nobody is compelled???!!! Excuse me. What about the person who HAS to have a car to get to work but can't pay cash & isn't eligible for a low interest loan. They turn to the ONLY avenue available to them & get raked over the coals. Or, what about a low income family that runs short to buy groceries for their kids, & takes a loan to get to the next pay check? Or, people who need a loan to pay rent so they aren't evicted? Or, people who NEED their medication but can't afford it? There are so many reasons people are compelled to take out horrible loans, I can't even begin to list them all.

And, the very worst part is the corporations are trying to turn us ALL into that....Impoverished people who have to pay out every last dime in endless debt. Credit cards can change your rate at ANY time, for ANY reason. Or, if you are late on one, they raise your interest on them ALL. And, everyone who has ever lived paycheck to paycheck knows the precarious perch of falling behind into falling off a cliff. It is getting bad. I am not talking about people buying things they can't afford, I am talking about people trying to keep their head above water & use credit to get through a bad time & end up worse off....

It is SOOOOOOOOOOOOOOOOOOO disgusting. And, the disdain & blame that wealth has towards hard working people who lack the education, & resources to break the cycle is sick.

:rant:

[Matsubara]

1. I wish I could rec these kind of stories ten times.

Check Cashing places, payday loans, rent-to-own, can't rent an apartment without checking account & good credit history...

There are so many other ways that the poor get socked it isn't remotely funny. No wonder even one week unemployed is enough to send a lot of people into a spiral leading to homelessness.

[calimary]

22. Yeah, me too.

Fortunately, these stories ARE attracting more rec's than they used to. They get into Greatest all the time now. That's a hopeful sign.

:thumbsup:

[Matsubara]

2. OMG - Just read the article. $8000 bux for a 6-year old Saturn with 100+K miles?!?!

Lady was ripped off big time.

A few years back I bought a 5 year old Escort wagon in good condition with only 70K miles and it was $3K.

Those people are sharks. Too bad she couldn't wait and save up a couple grand and buy a used car with cash from the classifieds.

[Jim Warren]

8. 6 year old Saturn sedan w/100k today=$4790

KBB price for a 2001 4dr SL, close enough.
The gal in the article basically got trimmed by better than $3000!
Opportunist pricing is more like. Poor people buy payments not total price.

BTW...I've got an Escort Wagon that had 40k on it when I bought it and paid $3500. That was five years ago and still driving it everyday....with 34 mpg I am happy to say.

[madrchsod]

25. a 6 year old saturn that`s going to cost a months net to fix.

[BluePatriot]

48. Things like this

make me thankful my Dad is a mechanic. I have seen so many other people get screwed on car purchases / repairs. Dad can fix a "beater" and make it go for a few years courtesy of an auto parts store.

I guess it goes to show that connections are important, and connections like this aren't always available to the poor (single women come to mind) Everyone should try to find a shade tree mechanic relative/friend/guy at work, or try tinkering with a car themselves, it is so worth it in the long run.

/finding out life is more about connections and chance than education or skill
//yeah, it sucks

[Morgana LaFey]

3. K&R

[MannyGoldstein]

4. Like Hedge Funds That Push Subprime Lending?

Edwards Says He Didn't Know About Subprime Push

My favorite quote: "Those are the things I remember," he said. "They may have told me more." :rofl:


Clearly, Edwards is looking to replace Gonzales on the comedic witness circuit.

[JTFrog]

19. Sure, it's about as clear

as his IWR stance. :shrug:

Edwards said his role at a company with a growing stake in the subprime industry should not be seen as undermining his commitment to helping the poor. He noted that since the 2004 election, he has founded a poverty think tank, started a charity for poor college students and assisted campaigns to raise the minimum wage.

"If you put it in the context of all those things, it's very clear where my heart is and where my commitment is," he said

[truedelphi]

5. You know those ads that run on TV - let us help you by giving you thousands

Of dollars in your checking account - with just your signature as verification?

I fast froze one on my VCD - you pay 922% to get that money from one such company.

For another - if you borow 2000, you have to pay back 42 two hundred dollar payments - and I can only imagine that it is set uyp so that you can't pay it off early. (42 months times $200)

There have been several newspaper articles about families on military bases being hit hard
by these scandalous practices.

[siligut]

46. Predatory lending! Didn’t that use to be illegal? nt

[FatDave]

51. A lot of things used to be illegal (nt)

[stillcool]

6. ah jeez...I had to add my two...or three ..cents

http://www.ashrafdehghani.com/articles-english/on%20prison.htm
A Report on the Injustice System in the USA
Written by: Pauline (a contributing writer to IPFG’s Publication; Payaam Fadaee)
Published in Payame Fadaee, Spring edition 2002

The US ruling class has established the largest forced labour sweatshop system in the world. There are now approximately 2 million inmates in US prisons compared to 1 million in 1994. These prisoners have become a source of billions of dollars in profits. In fact, the US has imprisoned a half million more people than in China which has 5 times the population. California alone has the biggest prison system in the Western industrialized world. It has more prisoners than France, Germany, Great Britain, Japan and Holland combined while these countries have 11 times the population of California. According to official figures, Iran incarcerates 220 citizens per 100,000, compared to US figures of 727. Overall, the total "criminal justice" system in the US, including those in prison, on parole and on probation, is approaching 6,000,000. In the last 20 years, 1000 new prisons have been built; yet they hold double their capacity.

Prisoners, 75% of who are either Black or Hispanic, are forced to work for 20 cents an hour, some even as low as 75 cents a day. They produce everything from eyewear and furniture to vehicle parts and computer software. This has lead to thousands of layoffs and the lowering of the overall wage scale of the entire working class. At Soledad Prison in California, prisoners produce work-shirts exported to Asia as well as El Salvadoran license plates more cheaply than in El Salvador, one of the poorest countries in the Western Hemisphere. A May/99 report in the Wall Street Journal summarized that while “more expensive private-sector workers may lose their jobs to prison labour, assigning work to the most cost-efficient producer is good for the economy.” The February/00 Wall Street Journal reported “Prisoners are excluded from employment calculation. And since most inmates are economically disadvantaged and unskilled, jailing so many people has effectively taken a big block of the nation's least-employable citizens out of the equation.”

Federal Prison Industries (FPI) whose trade name is UNICOR exports prisoner-made products as well as selling them to all federal agencies as required by federal law. FPI manufactures over 150 different products in 99 factories in 64 prisons (with 19 new ones on the way) in 30 states. It is the federal government's 35th largest contractor, just behind IBM and is exempt from any federal workplace regulations.
FPI's prison workforce produces 98% of the entire US market for equipment assembly services, 93% of paint and artist brushes, 92% of all kitchen assembly services, 46% of all personal armour, 36% of all household furnishings and 30% of all headset/microphone/speakers, etc. RW. Feb/00 FPI consistently advertises for companies "interested in leasing a ready-to-run prison industry" especially following congressional testimony in 1996 that reported a "pent-up demand for prison labour." Meanwhile, shareholders profiting from prison labour consistently lobby for the legislation of longer prison sentences in order to expand their workforce. At least 37 states have legalized the contracting out of prison labour to private corporations that have already set up operations inside state prisons. Prisons' business clients include: IBM, Boeing, Motorola Microsoft, AT&T Wireless, Texas Instruments, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom, TWA, Nordstrom, Revlon, Macys, Pierre Cardin, Target Stores
http://www.unicor.gov/
Key financials for Federal Prison Industries, Inc.
Company Type Government Agency
Fiscal Year-End September
2005 Sales (mil.) $833.6
1-Year Sales Growth (5.2%)
2005 Net Income (mil.) $64.5
1-Year Net Income Growth 1.4%
2005 Employees 19,720
1-Year Employee Growth 2.0%

In 1985 one out of every 320 Americans were in jail.
In 1995 one out of every 167 Americans were in jail.
Between1980 and 1994, the number of people in federal and state prisons increased 221%.
Today, 2 million Americans are in prison.
1.2 million are African-American men.

While there is debate over their underlying causes, these staggering statistics are generally thought to result from rigid drug laws, mandatory minimum sentences and increasingly tough legislation— such as California’s "three strikes" law. One fact remains undisputed: prisons have become big business.
-------------------
Prison Partners
In the tiny town of Lockhart, Texas a private prison run by Wakenhut (a for-profit private corporation) does business with a company called LTI. In this partnership the prisoners assemble circuit boards bound for hi-tech corporations. For LTI, moving manufacturing to the Lockhart prison was a no-brainer. There they found a captive workforce that did not require benefits or vacation pay, major tax incentives and a brand new assembly plant rented for only a symbolic fee. As a result, LTI’s plant in Austin, Texas was shut down and 150 people lost their jobs. In Michigan, through a similar arrangement, the majority of Brill Manufacturing Company’s workforce lost their jobs to state prison inmates.
http://www.itvs.org/shift/prison.html

Toxic Recycling
by ELIZABETH GROSSMAN

Research support for this article was provided by the Investigative Fund of The Nation Institute.

About ten miles northwest of Merced, amid the dairy farms and orchards of California's San Joaquin Valley, sits the Atwater Federal Penitentiary, its tower and low-slung buildings the same mustard yellow as the dry fields that stretch out beyond the chain-link fence and concertina wire toward the Sierra Nevadas. Inside this maximum-security prison, inmates smash computer monitors with hammers, releasing dust that contains lead, cadmium, barium and other toxic substances. These inmates are employed by the electronics recycling division of Federal Prison Industries (better known as UNICOR). With sales that have nearly tripled since 2002, electronics recycling is UNICOR's fastest-growing business. But according to reports from prisons where this work is being done and interviews with former inmates employed by UNICOR, it's taking place under conditions that pose serious hazards to prison staff and inmates--and, ultimately, to the rest of America and the world.
------------------------------------------------------------------------------------------------
"UNICOR's program is labor intensive, so capital machinery and equipment expenses are minimized, this helps keep prices low," says a company brochure. With a captive workforce UNICOR's electronics recycling program can afford to be labor intensive. Because it is run by the Bureau of Prisons, UNICOR does not have to pay minimum wages--recent wages were $0.23 to $1.15 an hour--or provide benefits. Though UNICOR is not taxpayer supported, its pay scale would not be possible without taxpayer support of the inmates.
http://www.thenation.com/doc/20051121/grossman

Captive Labor
America's Prisoner's As Corporate Workforce
By Gordon Lafer The American Prospect, 1 September 1999
http://www.postcarbon.org/node/2244
When most of us think of convicts at work, we picture them banging out license plates or digging ditches. Those images, however, are now far too limited to encompass the great range of jobs that America's prison workforce is performing. If you book a flight on TWA, you'll likely be talking to a prisoner at a California correctional facility that the airline uses for its reservations service. Microsoft has used Washington State prisoners to pack and ship Windows software. AT&T has used prisoners for telemarketing; Honda, for manufacturing parts; and even Toys "R" Us, for cleaning and stocking shelves for the next day's customers.
----------------------------------------------------------------------------------------
But the attractions of prison labor extend well beyond low wages. The prison labor system does away with statutory protections that progressives and unions have fought so hard to achieve over the last 100 years. Companies that use prison labor create islands of time in which, in terms of labor relations at least, it's still the late nineteenth century. Prison employers pay no health insurance, no unemployment insurance, no payroll or Social Security taxes, no workers' compensation, no vacation time, sick leave, or overtime. In fact, to the extent that prisoners have "benefits" like health insurance, the state picks up the tab. Prison workers can be hired, fired, or reassigned at will. Not only do they have no right to organize or strike; they also have no means of filing a grievance or voicing any kind of complaint whatsoever. They have no right to circulate an employee petition or newsletter, no right to call a meeting, and no access to the press. Prison labor is the ultimate flexible and disciplined workforce.

All of these conditions apply when the state administers the prison. But the prospect of such windfall profits from prison labor has also fueled a boom in the private prison industry. Such respected money managers as Allstate, Merrill Lynch, and Shearson Lehman have all invested in private prisons. As with other privatized public services, companies that operate private prisons aim to make money by operating corrections facilities for less than what the state pays them. If they can also contract prisoners out to private enterprises—forcing inmates to work either for nothing or for a very small fraction of their "wages" and pocketing the remainder of those "wages" as corporate profit—they can open up a second revenue stream. That would make private prisons into both public service contractors and the highest-margin temp agencies in the nation.
http://www.postcarbon.org/node/2244

The Prison Industrial Complex in America: Investment in Slavery
by Venerable Kobutsu Malone, Osho
The United States Constitution Permits Prison Slavery and Involuntary Servitude
-------------------------------
The secure housing, minimal support, minimal medical care and feeding of 2.2 million people is a costly endeavor consuming billions and billions of dollars of taxpayer's money every year in America. Corporations are lined up to receive a portion of the public funds used to support the self-perpetuating incarceration industry. States such as California spend more public funds, tax dollars, your money, my money, on prisons than for education and schools
-----------------------------------------------------------------------------------------------
The largest network of prison labor is run by the Federal Bureau of Prisons' manufacturing consortium, UNICOR. While paying inmate laborers entry-level wages of 23 cents an hour, UNICOR boasts of gross annual sales (primarily to the Department of Defense) of $250 million.

The correctional-industrial complex therefore relies on a sobering "joint venture" directly relating profits to increased incarceration rates for four kinds of "partners," only the first of whom are those seeking opportunities in prison construction. A second kind of partner stocks these prisons with stun guns, pepper spray, surveillance equipment, and other "disciplinary technology," corporations such as Adtech, American Detention Services, the Correctional Corporation of America and Space Master Enterprises. A third partner finds a state-guaranteed mass of consumers for food and other services in the prisoners themselves, such as Campbell's Soup and Szabo Correctional Services. The fourth partner can be any private industry or state-sponsored program that stands to gain from paying wages that only nominally distinguish captive forced labor from slavery. In this last category, an example of the former is Prison Blues and of the latter is UNICOR which uses prisoners to produce advanced military weaponary.
http://www.engaged-zen.org/articles/Kobutsu-Investing_in_Slavery.html

The California Prison Industry Authority (PIA) has established the Inmate Employability Program which uses its enterprises as the foundation for enhancing the employability of inmates about to be released upon parole.
# The PIA’s industries produce over 1,400 goods and services including: office furniture, clothing, food products, shoes, printing services, signs, binders, eye wear, gloves, license plates, cell equipment, and much more.
# PIA products and services are available to government entities, including federal, state, and local governmental agencies. The California Penal Code prohibits PIA from selling its products and services to the general public
# Up to 40 percent of an inmate’s wages is deducted for court-ordered restitution/fines and is transferred to the Crime Victims’ Restitution Fund. In FY 2005-06, over $700,000 of PIA inmates’ earnings was deposited. Since FY 1992-93, $6.5 million has been deposited to the Fund.
# Inmates receive wages of $.30 to $.95 per hour before deductions.
# The PIA maintains an “electronic catalog” of products which is available online at
http://www.pia.ca.gov/

[Wednesdays]

28. Oh man. That should have its own thread.

:wow:

[Dora]

35. This should definitely have its own thread.

This post does a GREAT JOB at putting it all together.

Would you consider reposting it independently?

[stillcool]

63. Actually...

I've posted it a couple of times. When I looked around some more I found Wackenhut/the GEO Group..which was a real eye-opener. It over-whelmed me a tad beyond my comprehension capacity....I probably will post it again when it all shakes out in my mind.

[JimDandy]

44. Don't compare China's

incarceration rate with ours. From what I understand, the reason their rate is lower is that they execute citizens for the same types of offenses for which we imprison ours! Hence the lower rate. Let's not encourage China to continue that horrific practice by patting them on the back for low incarceration rates.

Otherwise... I'm all with you!!! It disgusts me that UNICOR hawks the labor of our most vulnerable citizens -- inmates -- who have zero ability to fight back and, in some prisons, whom the majority of which are minorities!

[stillcool]

65. I suppose if I looked...

I could find a comparison of executions...I have no idea what I would find...but dead prisoners don't produce. To my mind....the articles... that go back to the 90's.. expose the huge prison population explosion, and how government, corporations and the military are intertwined. I was shocked at what I'd found...I had no idea that prisons were such a big business...and that so many corporations had their fingers in the pie.

[JimDandy]

73. Thanks for pulling all those articles together.

The China comment wasn't meant to distract from the great body of work you provided to educate us on the business of prisons and the corporations who have sunk to such depths to improve their bottom lines. I am very appreciative of your work. :toast:

[klyon]

56. They should have to pay the difference in pay to someone

victims maybe? It should be like a tariff. We need to bring back tariffs.

[JANdad]

7. As someone whose family was about two weeks away

from being homeless last year I can relate.

In 1999 I was a manager for the "Shack" and was promoted to District Manager. This time frame if you recall was at the tail end of the tech boom and life was good. In 2000, I grossed over $130k. Then in 2002 I suffered a heart attack at the age of 32 and had double bypass. At the urging of my doctors I stepped down from the hectic pace of retail and relocated to the Texas home office. Being in Dallas/Fort Worth and a neo-con stronghold, I soon lost my appetite for the office politics and sought employment elsewhere. With the terrible job market I bounced around from job to job for the next three years and finally landed on my feet again with a relo to Florida.

What does this have to do with poverty you may ask...well in my new role I am a Regional Manager for a day labor company...you know..."rent-a-bumb"

Sometimes I feel like crap for the job that I do, but other times I feel that I am at least helping those that would otherwise not work...work. You see, no one grows up dreaming of working for a day labor company. Most times, choices made in life force folks to work for such an organization; one which requires only a pulse and the proper ID's to work. Most of my workers have either a criminal record or addiction issue (more often than not, both) and have no means of transportation, so they are forced to either work for crap wages, or panhandle for their meager existence. These people do not want much...food, shelter, maybe their vice of choice (booze, cigs or dope) and a little respect. They are caught in such a vicious cycle. To listen to their stories can be at times heartbreaking and for each and every one of them, I say to myself...there by the grace of God go I...

[siligut]

45. It is a vicious cycle, I agree.

You are filling a need, and from what it sounds like, with compassion and understanding. It is hard to work with people who are down on their luck, but you should never feel like crap. You are doing a valuable job.

[calimary]

74. It's gut-wrenching when you hear it first-hand (or near first-hand).

My kid has been working at benefits for the homeless and for street kids (his band plays at the concerts for free to bring in more people). Some of the stories the volunteers tell - they just make you shudder. I will NEVER be able to get out of my mind the picture they paint of nights out on the street where you can hear the sound of crying - from frightened runaways huddled here and there - alone, with nowhere to turn, except - if they're lucky - one of these charity groups (that obviously is already stretched so thin, and can't help them all).

It just makes me want to SCREAM!!!

And yet we still have no problem flushing 100-THOUSAND BUCKS A MINUTE down the toilet in Iraq. Just think of what that money could do HERE...

Welcome to DU! Thank God for people like you, pitching in as you do.

[bobbolink]

9. What's really FUNNY-- so many of these profiteeers are Fundies...

And the bible specifically talks against "usury". Not just gouging, but all usury.

If what they believe is true, they have a big surprise waiting for them! :evilgrin:

[brer cat]

12. Do you ever wonder if they read the Bible they are so wont

to push in our face? I'm a Christian, but far removed from a fundie. They will get what they sow, doncha think?

Take care, friend!

:hug:

[bobbolink]

50. I'd like to know what "version" it is they read! They're so proud of knowing the bible backwards an

and forwards..... :crazy:

ON the other hand, I don't see the "liberal" churches having a better understanding of the bible's teaching about poverty, and I don't see the Dems dealing with poverty any better than the Christians. So, there you have it. Plenty of crap to go around. :hi:

It all seems completely hopeless,to me. Actually, some of the fundies are coming around to a much better understanding and activism about poverty than the liberals! Yet, the liberals will scream bloody murder if poor folk then are wooed to the fundies. GET A CLUE, LIBERALS!!!

Good to "see" you, brer cat! :hug: :loveya: :hug:

[Nobody]

24. According to fundy belief

wealth is a blessing from god. If you're poor, you're poor because you deserve to be.

Is it any wonder that with beliefs like this, the Fundies are super-right-wing conservative and support every single program that would make it harder on the poor?

Is it any wonder that these people lead the way to disparaging contempt for those working three jobs or more trying like hell to keep from sinking?

They're the ones who believe in the bible. They should read the New Testament gospels more often.

I can detect the hypocrisy from a mile away.

[earth mom]

34. Yep-that fundie belief that god is blessing only those who deserve it

is the most sickening twisted thing I've ever heard! :wtf:

[Nikki Stone1]

10. AH George Mason...Isn't that where that Williams economist guy is from, the one that subs for Rush?

The official university of the military industrial complex.

[cosmicdot]

13. former Enron Director Wendy Gramm is at George Mason

former TX Senator's spouse ... is headquartered there ... heads up another rightwing 'think tank' ...


Wendy Lee Gramm helped continue the "Reagan revolution" as a free-market regulator and chairman of the Commodity Futures Trading Commission from 1988 to 1993, so perhaps it was no surprise the wife of former Texas Sen. Phil Gramm ended up on the board of Enron in 1993. But that post brought her a hefty dose of notoriety when the Enron debacle unfolded in late 2001. As a member of the company's audit and compliance committee, she helped approve financial statements and acted as the liaison to auditors Arthur Andersen. Enron subsequently collapsed, Arthur Andersen folded, and Gramm left the board.

So where is Gramm now? Ironically, she is in the center of the corporate governance debate. Gramm, 59, is chairman of regulatory studies for the Mercatus Center, a conservative think tank affiliated with George Mason University in Virginia.

http://www.usnews.com/usnews/biztech/articles/040126/26eewhere.htm

I'm sure she was a big help to Ken Lay.

GMU is a public university.

[Nikki Stone1]

26. As a public university, it shouldn't play host to these parasites

Universities are becoming whores these days.

[klyon]

57. that is Virginia

Conservative doesn't begin to describe that part of Virginia. William & Mary is also a public university and is all conservative all the time.

KL

[brer cat]

11. You do so "get it" debbierlus.

Let us work to get respect and dignity for the poor, and find the resources to break the cycle.

K&R

[Cleita]

14. The working poor have always gotten the short shrift.

They end up paying all the fees like in banks while the ultra wealthy get free services. It's not fair.

[bobbolink]

68. elderly and disabled poor people don't do so well, either.

:hi:

[Rosemary2205]

15. Georgia outlawed payday loans.

They are beating on the Title pawn places now trying to figure out how to shut them down too - or at least keep them on a VERY short leash.

[hfojvt]

16. I talked about the same thing last week

I despise payday loan places.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x865966#869126

[Breeze54]

17. Proud to be Recommend 25!!

Right on!!!!!!!!!!!!!

Thank You for telling the nitty-gritty truth! :thumbsup: :thumbsup:

PLEASE VOTE FOR THE CANDIDATE WHO WILL QUELL THIS SYCOPHANT BEHAVIOR AGAINST POOR PEOPLE!!!!

:grr:

[undergroundpanther]

18. The parable of the box

Has got us trapped into BELIEVING we owe a corporation CEO ANYTHING.


Another way to put this is that social arrangements of nonaggressive cultures eliminate the polarity between selfishness and altruism by making the two identical: In a "good" culture, the man atop the box from the parable above would have been scorned, despised, exiled, or otherwise prevented from damaging the community. To behave in such a selfish and destructive manner would be considered insane. Even had he conceived such a preposterous idea as hoarding all the fish, he would have been absolutely disallowed because the box was held at the expense of the majority, as well as at the expense of future generations. For him to be a rich and influential member of a good culture, he would have had to give away many or all of the fish.. The act of giving would have made him rich in esteem. But he would never have been allowed to strip the river. There would have been no fear with regard to the "gift" of fish, for social arrangements would have made him secure in the knowledge that if his next fishing trip failed, his more successful neighbors would feed him, just as this time he had fed them.
http://ranprieur.com/readings/jensenbox.html

[Tyler Durden]

20. Like I say, More Socialist leanings will improve the society. (n/t)

[bunkerbuster1]

29. Not unless we ridicule those who continue to use "Socialist" as an insult.

It is a very popular insult on right-wing radio, and is used daily by right-wing LTE writers.

It's supposed to be a conversation stopper--"This is socialist!"

Such sentiments need to be ridiculed, early and often.

[Tyler Durden]

30. Amen to that. n/t

[bleedingheart]

21. it has always been this way and while it doesn't make it right

I can't help but wonder what is wrong with us as a species that we can be so cruel to one another...

If you are rich you have higher credit scores and you get "deals" from banks...they want your business so they lure you to their bank with great interest rates and perks...

If you are poor and need a loan...well you are going to have to pay through the nose....so you are given a loan that is literally a lead weight around your neck...

[The Backlash Cometh]

23. IF we lived in a country that respected labor and the consumer,

such words would easily be challenged. But, since the NASCAR people decided to give their support to the boss hogs, it's going to be a little more difficult to do.

[madrchsod]

27. "he lives in a mind of his own"

http://www.gmu.edu/jbc/Tyler/
Tyler Cowen's Personal Web Page.

[camero]

31. And everybody wonders why I hate rich people

Enough said

[earth mom]

32. Yet there are some even here on DU who think nothing of rampant capitalism

who swear that credit cards are the cats meow...especially because they themselves pay them off every month and get all kinds of perks for doing so.

The lack of compassion in this country of the plight of the working class and poor is sickening. :puke:

[unpossibles]

33. very true

I used to have great credit and fully paid off my cards as early as possible, then after someone rear ended me, I had to take some time off work for injuries, and while waiting for my case to be settled, I was paying the minimum amount on my credit cards for a month or two, and wasn't too worried because I was not near my credit limit. Well, the issuing bank decided to lower my limit to what my balance was, then when my interest pushed it above the limit, I got slammed with what ended up being thousands of dollars in "over limit" fees and late fees. To make it worse, soon after this I was laid off from a job which moved the plant overseas, and although I got severance things were very tight forcing me to work two jobs.

It took me almost a decade to pay off what was a considerably small principal (like under $2000) and I am normally very responsible and have a low-cost and thrifty lifestyle. I would say that the interest and late fees far outweighed the original debt, and my credit score is still screwed for a couple more years. It's not as bad as it could be, but it definitely makes it near impossible to get any kind of reasonable rate loans now.

It really woke me up to how awful these companies are. I had considered myself a "good customer" then I realized that they were more than happy to screw me over to make money, that they don't like it when you can pay your cards off.


The other side of the coin, my brother is kind of a yuppie and makes a lot of money and he gets stuff for free and low interest all the time. Gotta love it: the people who can afford to buy something often don't have to. But the rich are the ones getting screwed in this country.... </sarcasm>

[Hamlette]

36. the interest rates and prices are high to reflect the risk

if a lending institution's interest rate is capped at an amount we think is reasonable they will not lend to high risk individuals. They also will not lend money secured by over priced cars (or whatever).

Those are the choices. Higher prices and interest rates or nothing. It is facing reality. You either force banks to take the high risk (loan to everyone at the same rate regardless of risk) or you allow banks to offer different rates based on risk. If you have decent credit and a reasonable work history you can shop around and find a better price and interest rate.

Do you really want to force banks to loan money to any risk at the same rate as a good risk? Your interest rate will go up...might sky rocket. I think if I work a pay my bills I should be able to get an interest rate that reflects my history. If I'm going to pay the same for my goods and interest as anyone, why would I pay back any loan? Out of the goodness of my heart? To a BANK? I don't think so.

The only other option is to have the government subsidize poor credit risks. Which we do to some extent. That's the discussion we should be having, not whether lenders can charge poor credit risks higher fees/interest. And if government subsidizes these loans, what do we subsidize? A car? If so, who decides what kind of car? A house? How much of a house? Clothing? Make-up? Haircuts?

[Greyhound]

39. Poppycock. There is a perfectly viable alternative, revert to the economic system

that our country had from its founding to the early 20th century.

Do you remember when it was that you drank the kool-aid?

All that is lacking is the will.

[Matariki]

42. Speaking of 'kool-aid'

Do you really believe the poor had it better off before the early 20th century? Before the reforms FDR made? You've got to be kidding me.

Please explain.

[Greyhound]

54. Not at all, the poor were stepped on then as well. We haven't regressed all the way back

but we are more than half way there. We've sat idly by and let them skew the bankruptcy laws to make it easier for financial entities to prey upon the weak and the ignorant and much harder for people to get out from under crushing debt that they have no hope of repaying, in essence we now have a national "company store" system. We now have a http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x885427">national slave labor industry. Our citizens most basic rights are http://en.wikipedia.org/wiki/USA_PATRIOT_Act">withheld from them. Our political system has literally devolved to a system of institutional bribery and thus, our "leaders" no longer respond to their constituents wishes and have no care for the consequences they bear.

The problem with FDR's reforms was that he addressed symptoms and left the cause in place. Instead of dissolving the central banking system and pushing the needed changes to the 14th amendment, he propped them up and let them stand. Of course he himself was a patrician born to the manor royal.

We have gone so far that people have come to defend their own abuse as necessary because they can no longer imagine the alternative.

[Hamlette]

53. that would be slavery? Farming? Relying on private charity?

really?

I'm not sure it was necessary to attack me without even telling me why you think it was better when we had slaves, no social security, no unemployment benefits, no Medicare, no Medicaid, no workers compensation etc.

[Greyhound]

55. Slavery was a social institution, not an economic model and farming is still our largest industry.

I referred to the economic system that was constitutionally mandated. Section 8, clause 5, reserved to congress the exclusive power "To coin Money, regulate the Value thereof, and of foreign Coin..." and was written specifically to exclude the European banking families and their industry of usury. The Federal Reserve Act was the product of a well documented conspiracy to overthrow this power, perpetrated by the Republik Party.

The way you laid out your argument led me to believe that you have sufficient understanding of economics and the banking industry to understand that it is not necessary, yet you stated that there was no alternative to "the way it is". If I am wrong, I apologize.

Also, there is nothing about our banking system that supports the programs you mentioned, nor would they be excluded by the system we used to have.

[Hamlette]

67. I actually do know a little about banking

but I have no idea what you are talking about.

[Greyhound]

70. What is a little about the banking industry? Do you have an understanding of how the central banking

system works? How money is created by those banks by fiat except for the interest charged on that "loan"? How the various central banks work together for the exclusive benefit of their owners, not the customers or nations that cede control of their economies to them?

The point is that their's is not the only way and the founders of this nation tried to keep our nation away from their control.

[Hamlette]

71. how about this as a starting point for the discussion

should people with bad credit, who do no repay the loans they get, be able to continue getting loans? If so, who pays for the good they receive on credit? If not, how do people with marginal credit "make a come back"?

What I know about banking or how I know it isn't relevant. But rather than a discussion about how the history is wrong, tell me how the practice is. I want a place to loan me money when I want it. If not a bank which is heavily regulated by both the state and federal government, then who/what?

[Greyhound]

72. That is the crux of the biscuit (thanks, Frank), the credit based economy and

the usury system. Your question stems from the false premise that interest rates are charged to reflect some perceived risk of repayment. My initial reply was that the basic system is the problem and that usurious interest is but a symptom of it.

Contrary to popular myth, higher interest is not determined by risk, but by assets and the likelihood of further/future business. The uber-wealthy are, as a group, notorious for failing to pay their bills, just ask any restaurateur, or hotel owner, that has had her/his pace trashed by a party thrown by one of them that got out of hand. Likewise the working classes will generally work themselves to death, often depriving their own families, to pay off debt.

This system has been intentionally evolved to what we have now, a perverse system where the common people are literally their credit rating. A system, BTW, that is rife with errors and has, or because there is, utterly no accountability. A person's ability to work, to find a home, to exist in this society, is determined by this arbitrary rating.

This thread is about the system of profiting from poverty, a practice with its roots in antiquity and railed against for just as long, in spite of the fact that it has been specifically forbade by at least 2 of the 3 religions of the desert God (I don't know about Islam, but since Mohammad was a merchant, I suspect it is not), it has continued with only the briefest of respites, for thousands of years, and has become ubiquitous in the last 30 or 40.

Your question doesn't even contemplate the possibility of an economy without the issuance of credit for consumable purchases. The whole system of permanent inflation is a direct result of this scheme which only benefits the financial industry at the expense of the rest of society.

[gravity]

49. That's the problem in a nutshell

Banks aren't going to loan to someone unless they will at least break even with the money. If you set a ceiling interest rate, then the banks are not going to give any loans to high risks groups. The problem is that there would be individuals who will be willing to pay the higher interest rates but can't get a loan because of the ceiling.

[Blackhatjack]

37. The weak and disabled are prey for the government enabled sharks...

[Blackhatjack]

38. We have an OUTRAGEOUS Payday Lender Ad running here ...

The President of Payday Lenders Ad (Borrow only what you are comfortable being able to repay on time) makes it sound like the borrowers are making a discretionary choice.

If people had another choice, they would not choose a payday loan.

When a medical emergency arises for someone without health insurance, or a parent loses their job and has no food in the house, or power has been turned off and the temperature outside is below freezing, does anyone seriously consider the borrower from a payday lender to be making a discretionary choice?

And what he does not say is that if you do borrow from us(payday lenders) we will reloan you the amount you owe OVER AND OVER AGAIN with additional fees BECAUSE your state has been preempted from regulating us with predatory lending laws. They got the federal government to rule that states cannot regulate them because they claim to be covered by federal law that preempts such regulation by states, which gives them a free hand to take every last dime the borrower has.

To be poor means you have no choice.

[debbierlus]

40. Wow. Posted this before I went to bed -

Lots of outrage on this issue all around, I see. This is definitely an issue that desperately needs exposure and progressive political outcry. Thanks DU.

[bunkerbuster1]

41. The extensive comments pages at BW are worth a look as well.

The usual right-wing trollage, but some thoughtful debate as well.

Didn't realize this story had been online since last week, but I'm glad you posted the link, or else I probably wouldn't have seen it.

[Blackhatjack]

43. I have a Question: Why should anyone who is a taxpayer pay more interest than others?

The United States Government makes money available to US Banking System at ridiculously low costs that no American citizen can receive.

The funds made available are directly related to the tax revenue collected from all AMerican citizens, businesses and corporations.

Why should any taxpayer have to pay more interest for the very same loan just because they have a lower credit rating than the millionaire investor?

If everything is related to the risk system of lending, then why do Banks and Mortgage Companies not just lend to the richest 1% ?? It is assumed that their risk is the least?

It is because the richest 1% can get the lowest interest rates anywhere they apply. THe real profit is in finding individuals who can be charged the highest interest rates and be burdened with the highest fees for service.

If Congress were to pass a law that interest rates are capped at 10%, you would find that every lender would still make a profit and the increase in consumer savings AND spending would jump start this economy like has never been seen before. However, that will never happen as long as Banks and the financial sector have millions to contribute to campaign coffers of members of Congress for the express purpose of protecting their interests.

[porphyrian]

47. It's nothing poor people don't know, but the rest of you need to. - n/t

[acmavm]

52. Readers comments (not unlike some you'll see here)...

Most recent comments

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Leave your own comments

Nickname: Jeff Jaarda, Naples, FL
Review: Business Week should write an article about those of us who actually read disclosures and credit applications we signed.
Date reviewed: May 15, 2007 12:56 PM
Nickname: Ray
Review: all of the news stories focus on the small percentage of people that have problems paying, not the 80% of subprime borrowers that have a home where they would not have 10 years ago or the 80% that have a car when they could not have finaced one 10 years ago. I review thousands of credit reports a year and I wouldn't trust most of these folks with a couple of dollars to go across the street to buy me a coffee. It all boils down to education, I'll bet none of these folks graduated from high school.
Date reviewed: May 15, 2007 12:46 PM
Nickname: teacher teacher
Review: Why is it a taboo to teach about money in schools? It shouldn't be.
Date reviewed: May 15, 2007 10:50 AM
Nickname: delphi
Review: Congrats to BW for taking on the underbelly of modern American capitalism. The article was informative and emotional. The magazine has done a great service.
Date reviewed: May 15, 2007 4:55 AM
Nickname: Patrick
Review: This is Republican America. Caveat Emptor.
Date reviewed: May 15, 2007 12:43 AM
Nickname: tomcat
Review: If everyone lived within their means, the economy would implode. Remember when you were a kid 50 years ago and being thrifty was a virtue?
Date reviewed: May 15, 2007 12:17 AM
Nickname: CD
Review: To address "not choosing not to be born poor, not have a car or a job." Cars, jobs, houses, and even education do not grow in nature or fall from the sky. They must be produced by human effort, so even though some may not choose not to have a car to get to work, arguing that that somehow entitles them to it (even at an "affordable" rate) means those who produce it become slaves to those who don't--in whole or in part. Sadly, the weathier a society becomes, the more likely its members are to forget this basic truth--one that will never change no matter how wealthy a society becomes. In the end, all the bleeding heart arguments in the world ultimately boil down to the same solution: the use of physical force to extract the product of the efforts of some to serve and benefit the "need" of others. There's no way around it, but there's no shortage of people who work even harder to deny or justify it.
Date reviewed: May 14, 2007 11:37 PM
Nickname: Rogelio
Review: I enjoyed this article. I would also like to say that I was one of these people. I owed $20,000 in high interest credit card debt and $10,000 in student loans and made only $34,000/yr. I signed on with the consumer credit counseling service and after 5 years am debt free and have a credit score of 780. My secret? That's easy. I just said NO! No,to the new bauble that I really did not need. No, to the new car when my old one is doing just fine. I discovered that stuff did not make me happier but paying for the stuff sure as hell made me unhappy. After five years of just saying no I don't even think about the newest gadget. I wait until it is yesterday's news and can get it at a cut rate. In closing, being debt free is a very liberating experience and I can say that I absolutely will never indebt myself as I have in the past.
Date reviewed: May 14, 2007 11:34 PM
Nickname: smendler
Review: The question is: will the system decide to rein itself in BEFORE it engenders a violent response from the poor - or AFTER? Human beings, after all, have their limits.
Date reviewed: May 14, 2007 11:34 PM
Nickname: nene
Review: Bad choices, irresponsibility. These also describe the government of the US which has borrowed trillions which we "responsible" folks will have to pay off. The tax burden alone will send more of us into working poverty. And you thought poor people were the only stupid ones?
Date reviewed: May 14, 2007 11:05 PM

[wryter2000]

58. "No to the new bauble"

I can't tell you how angry this makes me. Ronnie The Saint Reagan's glorious economy cost us my husband's job. I still worked, but I didn't make enough to get by. We used to go to the ATM to get cash from a credit card so we could buy food. Don't effing talk to me about baubles.

When our landlord decided to sell the house we lived in, we almost ended up homeless. We were saved by two things...

1) my husband started getting Social Security, so we had enough money, and
2) a sweet couple decided to rent to us when I explained why our credit was so bad and I begged and pleaded.

That couple sold us the house. By the time they did, our credit was excellent. I still pay off my credit cards before those bastards can charge me interest. I've lived on both sides of that fence, and baubles ain't got nothing to do with it.

The guy who wrote that needs to go hungry for a few days.

[acmavm]

59. Yep, them that got theirs sure as hell begrudge the same thing

to those less fortunate, don't they???

[Nobody]

69. They sure do!

It boils down to one thing: The Haves hate it when the Have-Nots have something. Anything at all.

[Mark Twain Girl]

60. Many of those comments are not surprising, but no less disturbing for it. n/t

[Tigress DEM]

61. Ah, Welcome back to the NEW MedEVIL times, courtesey BUSHco!

The already brought back the Peasant Tax where a corporation can take out insurance on you based on the fact they may need to spend money to replace you if you die.

So that tells you what they think of us.

Sigh. Think I've taken in all the truth I can for one day. Have to go digest it all and dredge up some hope for our survival as a species. It's looking a bit bleak today, but it's been worse.

[WindRavenX]

62. I'm just amazed pay-day loans are legal with their interests rates

It's predatory and should surely be criminal.

[ProudDad]

64. I know this will piss of the capitalists

but enough food, a decent place to live and medical care should be a RIGHT for EVERY PERSON in any civilized society.

If the U.S. were at all civilized, these loan sharks would be unnecessary.

[conspirator]

66. Living of loans is the form of modern slavery nt