Customer Reviews

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

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1 star:		(3)

 

 

Gary Rivlin brings clarity and depth in this report on the predatory lending business and other aspects of what he calls Poverty, Inc., the corporate efforts to make big profits on the backs of America's hard working poor and financially vulnerable.

Based on hundreds of interviews, the book combines a business reporters' careful sense of detail with the facts, numbers, policies and business decisions that have defined the industries involved, as well as a biographers eye for human detail and personality that draws us into the stories. His profiles of the business folks, advocates and unfortunate victims really drive the writing and make human the complicated web of check cashers, payday lenders, rent to owners and others who are ravaging our low income communities in a way that makes the casino business look like small potatoes.

Rivlin has taken a complicated topic and created a page-turning pot boiler that will raise your awareness and, regardless of your personal take on the issues, likely raise your hackles as well. Bravo!

I've read Gary Rivlin's other books -- Fire on the Prairie, Drive By and The Plot to Get Bill Gates -- and this book continues what I liked about those books: great, solid reporting and research, but presented as a very readable and interesting story.

Some of the characters Rivlin found are just wonderful. "Chris Browning knows she can be difficult. But what are you going to do when you're surrounded by idiots and fools?" Browning worked for years in a payday loan store in Mansfield, OH, knows where the bodies are buried, and isn't afraid to talk. She's just one of the entertaining characters in BROKE, USA. Rivlin also found those working to stem the tide of foreclosure and wealth stripping - people like Bill Faith, of Columbus, OH, who gets things done, like getting Ohio to pass a referendum limiting predatory lending despite being outspent 60 to 1 by the industry. "BROKE, USA" weaves the stories of these characters together to tell a great story about how payday grew from nothing to being a multi-billion dollar industry in just a dozen or so years.

This isn't a book about the big picture of the financial crisis. But if you want to see inside a huge part of real Americans' daily financial lives and the pain large publicly-traded companies like Citigroup will inflict on struggling people in order to continue paying themselves millions in bonuses - this book delivers.

Jackson Hewitt, H&R Block, Rent-A-Center, Citicorp, your friendly neighborhood pawn shop, Cash America, are just a few of the crooks hiding under the veil of legitimacy, who are in effect legal "Crooks." The book pulls back the cover on them all, and their absurd claim to be providing a needed service to a very vulnerable sector of America, "The Working Poor."

Not to say that those who use these services are blameless, but to say that if we had a functioning Government no such chicanery would exist. At the same time most of this kind of dealing came about because of "DEREGULATION."

Each time an attempt is made to put this Genie away for good the Industry lobbyists go to work and tout the need for such services. Bernie Madoff, Michael Milkin, Enron, Worldcom, Tyco, and Hospital Corporation of America, are all apart of the argument that left alone the market can and will police itself, and you right out of your money.

Take for instance the so called "Pay-day-loan. People who do business with such establishments take out a short term loan of say $200.00 dollars, with $30.00 dollars in interest for 2 weeks. So the story goes you can just pay the $30.00 interest while the principle is rolled over. Now the hole is growing. That short term loan continues to grow until there is no recourse but to take out another loan, likely with yet another such agency, to take care of the first. Fast talking representatives are hired to keep this madness going.

Rent-A-Center, has figured out a means to get an individual to pay 3-5 times the worth of a television set, and not a new set, mind you, but a used set. That is if you keep your payments up, and fulfill your contract. This has expanded into computers, furniture, appliances, etc. And guess what, it is all legal. Aint America grand. Do in a bunch of barely making it poor people and become a multi millionaire. Oh yes and the book names names.

Well written, though I fear some will come along and say that "hey no excuse for being so stupid to get involved with such CON ARTISTS in the first place." Yes I think Bernie Madoff thought the same thing.

For an informative look at the seedy side of capitalism pick up a copy of a book which should be apart of every high school economics class.

This is a good book about the poverty industry in the USA. It focused mostly on the pawn shops, payday loads, and other ways that the wealthy have taken advantage of the poor working class. Some of the stories in this book are very sad. It seems so wrong that people will purposely take advantage of others that are less educated and experienced with money. Often these business prey on those who hold low paying jobs, and mostly cause them to become even deeper in the hole in debt. These are not lazy people, but people who have not always been given the same advantages as others have. It seems that this industry goes after minorities. This book really opened my eyes to the banks and even some of the largest businesses in America. The profits are so good that these companies will engage in these style of commerce. In fact, after reading this book, I was traveling in a certain area of the Denver city, and I was amazed at how many pawn shops, payday loan shops, and rent to own shops were in the area. It seemed that these types of businesses control every block. These loading businesses enslave people with heavy fees and outrageous rates. This book certainly opened my heart to the working poor in America.

By telling the personal stories of those who have suffered deeply as well as of those who have profited abundantly, Gary Rivlin recounts the untold story behind the financial meltdown by focusing on what he calls Poverty, Inc., the highly profitable and highly exploitative industries of payday loans, rapid refunds, rent-to-own, high-interest car sales, and predatory mortgage loans that have made billions off the systematic exploitation of the poor. If the federal government has any role at all in regulating business in America, it ought to be involved in passing laws that regulate the highly discriminatory business practices that Rivlin examines in Broke, USA.

I just finished reading Broke, USA. I was not surprised that a book of this nature was enlightening. What surprised me is that it was so fascinating and entertaining.
The unconscionable profits made by prominent businesses which target the poor and desperate is not a new story.
Where this author (Gary Rivlin) excels, and why this book is such a worthwhile read, is that he cleverly packages the dry quantitative details along with warm character development and the inevitable belated and often insufficient reactions by state legislatures. After hearing the stories of loan victims, store managers and owners, lobbyists, businessmen, legislators, bankers, financiers, crusaders, etc., you can't help but be whipsawed along the compassion, anger and justice continuums. While it is easy to have empathy for the victims and those lending assistance, you will find a number of the other sides' points not just plausible, but compelling. Rivlin has succeeded in maintaining an intellectual balance of the issues that will make it hard to put the book down.
I would not be surprised if one day Broke USA's excellent intertwining of the facts and story telling is credited with minimizing the effects of the payday loan crisis, expediting the implementation of positive and reasonable alternatives, and the passage of citizen protection initiatives by state legislatures.

Due to nothing but luck I have never had to use a check-cashing service, patronized a rent-to-owe business or obtained a payday loan. The only time I have been in a pawn shop was to buy CDs and DVDS - so I was entirely ignorant of these businesses, their practices and their backgrounds, except that payday loan joints are now on every street corner - especially in my former hometown, Las Vegas.

Gary Rivlin's "Broke USA" in plain but entertaining language tells us how these industries work - and how the "Poverty Business" is now big business. He interviews every player - customer, regulator, activist and entrepreneur (talk about folks you want to love and hate at the same time). He distinguishes between outright crooks (home-repair mortgage schemes targeting elderly women) and businesses that are walking on seriously ethical thin ice - but do serve a clientele that no one else will touch.

The best part of the book is that is answers the question "Why should we pick on an industry providing emergency funds and services to the desperate?" Because they are not offering "emergency funds" but making 400% loans a way of life for their customers - and making a fortune for themselves. Drug dealers also provide services to the desperate - but that is not an argument for legalization. Not to mention that too much easy money (to the wrong people) has gotten the entire world economy into serious trouble.

Although, to be sure, this book points out the horrible nature of payday loans, furniture rental scams, etc, I was surprised this wasn't the straight-out attack I had suspected it would be. No, there are no complete villains here(though some come close), no obvious heroes. The overall complexity of the problem is very well covered- the fact that, for a lot of the working poor, the existing solutions- as awful, one-sided, and financially illogical as they are- are, sadly, often the only ones available.

Gary Rivlin went all over the country and deep into the archives to write "Broke, USA," but the narrative wears his work gracefully. He spent time with the lenders and with the borrowers, getting to know each side well enough to understand why the pain in poorer neighborhoods didn't just persist during the past few decades -- it accelerated, and intensified. Big names like Wells Fargo and Citigroup couldn't wait to get their hands dirty in the programs that took away the little money the working poor had been able to scrape together. A timely book, and an important one.

In Broke, USA journalist Gary Rivlin takes on "Poverty, Inc." - the financial services businesses that serve (and abuse) America's poorest citizens. Payday lenders, sub-prime mortgage brokers, pawn shops and many others take a beating in this book. I enjoyed Broke, USA but I came away feeling that the problems that Rivlin discusses will be very difficult to solve.

Broke USA is engaging. Rivlin has assembled an amazing set of anecdotes about how decent, hardworking Americans have seen their lives destroyed by high-interest loans. For instance, Rivlin details how Atlanta's sleazy mortgage brokers looked for elderly people with equity in their homes - then conned them into taking home-equity loans for repairs that the brokers never performed. There are countless similar anecdotes and the reader's blood boils.

Rivlin also details how mom-and-pop investors started Poverty, Inc. One of the principle characters is Allan Jones - a college dropout from Cleveland, Tennessee, who grew one store into more than 1300. At press time, his pre-tax profits exceeded $22 million per year. Rivlin portrays Jones as an amiable bumpkin; when discussing his huge home Jones even mentions that he always loved the house on "The Beverly Hillbillies" TV show. The book also makes clear, however, that the biggest names on Wall Street eventually jumped into sub-prime after learning of the huge profits.

The biggest drawback of the book is that - while Rivlin proposes many reforms - he seems to have no idea of how to solve the problem. Concerns about high-interest loans led to usury laws. But usury laws helped create loan sharking. Concerns about loan sharks led to "risk-based pricing," which helped crash the world economy. Rivlin does a great job of highlighting the problems - but the solutions are less clear.

Broke, USA definitely qualifies as advocacy journalism - Rivlin clearly detests the industry. In my opinion, he makes a strong case against Poverty, Inc. Along the way, he entertains the reader and provides much food for thought.