Broke, USA From Pawnshops to Poverty, Inc. – How the Working Poor Became Big Business is published by HarperBusiness in January 2010. This book has 368 pages in English, ISBN-13 978-0061733208.
For most, the Great Crash of 2008 has meant troubling times. Not so for those in the flourishing poverty industry, for whom shrinking wages, pink slips, and other economic woes spell an opportunity to expand and grow. Over the years, any number of mercenary entrepreneurs have taken advantage of an era of deregulation to devise high priced products to sell to the credit-hungry ranks of the working poor, from the instant tax refund to the payday loan. In the process, they’ve created an industry larger than the casino business and proven that even the pawnbrokers and check cashers, if they dream big enough, can grow very, very rich off those with thin wallets. Looking back across three decades, Gary Rivlin uncovers how the poverty industry actually invented the predatory subprime loan in the 1980s – eventually inspiring the likes of Countrywide and Wells Fargo to repurpose these toxic products for the USA’s middle class. As Rivlin’s tale reveals, these large chains are not only making fat profits and contributing to our current financial crisis – they are at the heart of it. “Broke, USA” is 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 neighbourhoods of Dayton, OH, it’s a subprime Fast Food Nation featuring an unforgettable cast of characters and memorable scenes. As Wall Street and the White House struggle to save the economy from collapse, Rivlin travels across the country profiling players ranging from a former small-town Tennessee debt collector whose business offering cash advances to the country’s working poor has earned him a net worth in the hundreds of millions, to legendary Wall Street dealmaker Sandy Weill, who rode a subprime loan business into control of the nation’s largest bank. He parallels their stories with the tale of those committed souls fighting back against the major corporations, chain franchises, and newly hatched enterprises that are fleecing the country’s hard-working 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 voice to the millions of ordinary Americans left devastated in its wake.
From Publishers Weekly
Journalist Rivlin (Fire on the Prairie) offers a superb exposé of the poverty business—the flock of companies that cater to (and prey on) the working poor. For people living paycheck to paycheck and sometimes falling behind with rent, car payments, and grocery bills, fringe financing and the ubiquitous Rent-A-Centers, Jackson Hewitt, payday lenders, pawnshops, and check cashers—may seem like their only safety net. These businesses may tout themselves as a necessary service and force for economic development in low-income communities, but Rivlin reveals their dark underbelly: punishing rates of interest and customer service reps explicitly trained to mislead customers who appear gullible. He delves into the effect of financial deregulation on fringe financing, predatory subprime lending, and the major players in this unsavory world, including Allan Jones, a debt collector, worth $200 million, and the activists and advocates like Bill Brennan who’ve faced them down in the courts. A timely, important, and deeply disturbing look at the cycle of debt of the nation’s most vulnerable. *(June) *
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Starred Review Long before subprime lending and its role in the near-collapse of the U.S. financial system, a critical mass of businesses aimed at the working poor had been growing across the nation and exerting power in Washington. Award-winning reporter Rivlin chronicles the boom in the “fringe financial sector” as pawnshops, pay-day lenders, and rent-to-own stores have blossomed, gone public, and gained a measure of respectability, all by targeting their overpriced services to the working poor. Whether they have been exploiting their customers or merely providing them with desperately needed services is a matter of perspective to the gallery of characters Rivlin interviewed: borrowers who lost their homes, small-town debt collectors who moved into the cash-advance business, and consumer advocates fighting to curb the abuses of Poverty Inc., which has generated an economy of at least $100 billion a year compared to $60 billion for casinos. This is a powerful analysis, detailing how the financial sector has come to its current state of crisis and including personal stories of some among the millions of working Americans who have been exploited along the way. –Vanessa Bush