My comments to BusinessWeek.com
in May-June 2007 on The Debate Room topic
"Stop Fleecing Poor Americans"
As BusinessWeek.com states on their Debate Room FAQ page, they carefully read and edit each user comment, and each of my posts were slightly altered in various ways (some improvements, some not) from the original form I submitted them in.
So, just to make my original, unedited comments available, I'm putting them on my own website.
Below are my original, unedited comments. All I did to them below was change some URLs to links, and add some other HTML formatting (the original didn't have any). I didn't even fix my typos.
The edited comments are available on BusinessWeek.com's Debate Room page, Stop Fleecing Poor Americans.
Thank you to BusinessWeek for helping to draw attention to the problem of poverty by featuring The Poverty Business as their May 21, 2007 cover story, and also for hosting this debate, as well as other debates and stories related to the topic of poverty.
First comment, submitted Friday, May 11, 2007 at 10:49 PM
Fleecing isn't the word for all this predatory lending.
It's more like flaying - given how the chronic shortage of money resulting from diligently and honestly repaying one's debts can profoundly reduce the quality of one's life, and diminish one's future opportunities, due to the inability to buy needed items.
The lack of money can even jeopardize one's health (and hence, one's very life), and also the health and lives of one's loved ones, if one cannot afford vitally-needed health care, and/or enough nutritious food for oneself, or one's children, or other relatives.
...just so you can pay your mortgage every month so you don't lose your house, pay your car payment so you don't lose your car, pay your car insurance so you can legally drive your car, pay for the inevitable car repairs so you can still get to work, pay for gasoline, food, your income taxes, Social Security, electricity, water and heating, and all those other necessary and virtually unavoidable expenses that are a part of the basic cost of living in our society.
Not everyone is fortunate enough to be able to even get a better than minimum wage job, and all these expenses combine to make life very hard for such people.
You don't even _have_ to be stupidly and exorbitantly wasting money on foolish frivolities in order to be struggling - these basic expenses alone are enough to drown many people.
And when you have to work so much merely to survive, you have hardly any time, let alone energy, left over to learn new skills which might be of use in gaining better employment. And if you want to go to school, you'll likely have to take on tons of debt for that, which will just dig the hole you're in even deeper.
The working poor don't deserve all this. Just the fact that they're _working_ poor, and not trying to steal for a living (unlike various predatory lenders), but resorting to whatever legitimate, legal means they have available to them to try to improve their situation (such as working, and trying to borrow money from the predatory lenders, who may be the only ones who will help them) - this proves that they're not just lazy, immoral bums.
Even if some people aren't as bright as they can possibly be when it comes to money - well, come on. You wouldn't say a stupid dog deserves to be a miserable, uncared-for beast of burden for the rest of its life, would you?
So, why would you say essentially the same about a person who isn't very bright and/or who makes mistakes? It's just cruel.
If you are not in favor of regulation of the predatory lenders (despite the fact that our federal government _used_ to have usury laws, which probably never should have been repealed) - then, maybe relief efforts for our nation's poor would be good.
Even just one generous rich person, _giving_ away money to individuals, not loaning it, could rescue a lot of poor people from utterly miserable lives of being enslaved to debt and never being able to get ahead financially because of the debt and the tons of interest and fees.
If fewer people were driven by the desperation of poverty into these predatory lending arrangements to begin with, the market would finally dry up and these scum would be out of business.
If I had the money, I'd give out grants myself to completely wipe out the debt of struggling people (and also to assist the newly debt-free so they don't possibly go back into debt). I have a personal loathing for predatory lenders, and I would love to stop them from stealing any more ill-gotten loot from so many honest hardworking people who are doing the very best they can under their very difficult circumstances.
I'd suggest a boycott, but it wouldn't really work too well, because the victims of this don't have many options and can't easily avoid predatory lenders when the choice is either, go to a predatory lender, or end up on the streets.
A boycott of credit cards is potentially more effective, because even many well-off people use credit cards (while payday loans and things like that are probably almost exclusively the province of lower-income, desperate people), and many merchants accept credit cards (but don't _have_ to).
And so, if the credit card companies' well-off customers and merchants decided to stop using credit cards, just to make a statement that the credit card companies' treatment of their more unfortunate customers is absolutely unacceptable - it would probably put a large dent in the credit card companies' pocketbook, and may persuade the credit card companies to clean up their act.
I strongly support a credit card boycott (you can search the web - I recommend using Yahoo - and easily find my web page about it; I also recommend reading my blog, where I wrote a bit about this BusinessWeek feature). That's only my focus because that is what has personally affected me the most. But it's obvious that credit cards are just the tip of the iceberg of predatory lenders.
However, I think a nice mixture of the following, and probably other ideas as well, may improve matters tremendously for the poor in general, regardless of the exact type of predatory lender:
- Regulation - usury laws put back in place, excessive fees being forbidden, etc., so this legalized loan sharking once again becomes illegal, as it deserves to be.
- Consumer awareness, so people know to watch out for these predatory scum and do whatever you have to do to avoid dealing with them.
- Financial education. I like the idea of a class being given in high schools.
- And generous grants (not loans) to individuals from caring wealthy people. These will prevent people from resorting to borrowing from predatory lenders to begin with - and rescue already drowning people from a gigantic, all-consuming black hole they could never possibly get themselves out of. It's almost like a boycott - what this comes down to is, putting the poor in a position to be realistically _able_ to boycott the predatory lenders.
There are probably other good, useful ideas out there as well.
Anyhow, thank you to BusinessWeek for featuring all these very insightful articles on this extremely important topic.
Second comment, submitted Saturday, May 12, 2007 at 2:52 PM
Hi SheetWise. Thanks for agreeing with me.
Unfortunately, I can't agree with you as well. I see that suggestion as rather cruel. I think, these people don't need to be "taught a lesson" - they need help and mercy.
_Real_ help and mercy, not pseudo-help such as the kind they'll get from loan sharks, which will make them the indebted slaves of those who "helped" them. At least we both agree that the loans are bad.
However, many of these loans for low-income people are worse that what you make them sound like above. I can't speak from first-hand experience regarding such loans - but I recommend reading the article titled "Loan Rangers" from the Tucson Weekly, which is on the web. Here's the link: http://www.tucsonweekly.com/gbase/currents/Content?oid=oid:44868
Still, as bad as such loans are, it may not be as bad as people having their electricity shut off for a week, not having any way to buy food, or being thrown out of their houses or apartments because they can't afford the rent.
I don't think small loans should be eliminated altogether - I think they should be made fair, and reasonably priced, so people don't get trapped in a vicious cycle of debt, and don't possibly end up having to take out yet more loans to make the payments on their previous loans.
In my opinion, depriving a struggling poor person of electricity, and gouging them with a $200 reconnection fee that they already can't afford, is just going to make it harder for them to do whatever they have to do to earn enough money to pay their bills.
Besides, the "deadbeat" may not be the only victim of this "lesson". The "deadbeat" may have many helpless dependents to support - children, elderly parents - and they'll all go without electricity for a week too, and the $200 reconnection fee could come out of the money for groceries for all of them.
I don't believe most poor people are "deadbeats" by choice. I believe they're honestly trying to do the best they can, but they just get overwhelmed by high cost of living - just basic costs like housing, utilities, transportation, car insurance, taxes, health care, etc. It all just costs too much for a person who may only be able to get minimum wage jobs.
Third comment, submitted Wednesday, May 16, 2007 at 2:13 AM
Sorry, but even if someone isn't making perfect decisions in their life, that doesn't mean everyone is now allowed to totally victimize and abuse that person.
Sure, it may be really stupid to walk down a dark alley late at night, but that doesn't mean muggers are now allowed to mug anyone stupid enough to do that.
To me, watching predatory lenders do what they do to the poor, and then shrugging one's shoulders and saying, "Well, it's their own fault, they have to take personal responsibility" - that's like watching a vicious mugging taking place, and then instead of trying to stop it and protect the person, smugly saying:
"Well, too bad for that stupid idiot walking down dark alleys late at night - they made their bed and now must lie in it. They have to take personal responsibility for their part in this vicious beating and mugging they're going through right now. Maybe getting beaten up and robbed will teach them a lesson. Actually, the mugger _deserves_ that idiot's money for teaching that idiot such a valuable lesson. It's all that idiot's fault - they never should have been walking down a dark alley late at night. They deserve what they get."
In my opinion, this callousness - blaming the victim - is a major part of what is wrong with our society.
I think that's a far greater menace to our society than someone maybe being naive, financially illiterate, perhaps too honest for their own good, and struggling and working hard, instead of turning to crime to pay their bills.
This cruel attitude, causing so many to turn a blind eye to innocent, honest, moral people's undeserved suffering, is part of what allows this tremendous injustice to keep happening.
Just because usury is now legal doesn't make it right.
However, since some among you are against making this crime once again be against the law - I thought of another possible solution (aside from caring, generous rich people rescuing the poor through grants, not loans) which wouldn't require the imposition of government regulation.
In my opinion, it is not in the least necessary to engage in any loan sharking, price gouging, or rampant, despicable deception in the form of bait-and-switch tactics, and obfuscatory legal terms and fine print - in order to run a profitable business.
And if I had the resources, I'd start my own business to compete with these vermin, and prove it. Being close to poverty myself, though, I don't have the resources - so all I can do is give this idea away.
The rampant crookedness of these businesses provides a tremendous opportunity for anyone who wishes to step in and (gasp) do business fairly and treat their impoverished customers well. (Sadly, in these industries, this appears to be a novel concept.)
So many people are sick to death of these leeches and loan sharks, and they will flock - no, stampede - to lenders who will treat them fairly and well.
I think, if some new competition entered these various industries which are currently dominated by predatory lenders, and actually offered truly fair and reasonable lending terms to poor people - the profits would be colossal.
Especially once these poverty-stricken people, thanks to your genuine help, actually got on their feet financially, whereupon they would doubtless remain loyal to you, and spread the word and send you everyone they know as customers (instead of cursing your name and warning everyone they know against getting involved with you).
And, if you happened to offer them a credit card with truly fair terms, they'll almost certainly keep using it even in prosperity (such as for online purchases and the overall convenience of plastic). And since credit card companies apparently make even more money from fees imposed on merchants than from gigantic late fees and so forth imposed on consumers - you'll still be in the money.
Meanwhile, the predatory lenders will have to clean up their acts just in order to still be able to compete with you.
In my opinion, the potential profits - both for your own business, and for society and the world at large - are mind-bogglingly huge.
Plus, you will literally be saving lives, rescuing people from poverty, hunger, ill health and inadequate medical care due to lack of funds, homelessness, and all the other horrors that come with poverty. You will be giving people a real chance at achieving prosperity, by providing something truly worthy of the name "financial services".
I think anyone who does this will be deservedly and rightly hailed as a hero and savior of society. And all for _making_ money, not even for giving it away for free.
Anyone who is interested, feel free to implement this idea. I'd appreciate credit, but I'd appreciate cash even more. Ha, ha, just a little joke. :-)
Seriously, anyone who is interested - take this idea and run with it. (And once you're rich - or even more rich - please consider donating to me). I wish you all the success in the world.
Fourth comment, submitted Friday, June 1, 2007 at 3:35 AM
Well, Aaron, you make a lot of assumptions about the poor which in many cases may not be true.
I'll use myself as an example. I am, at least for someone living in America, relatively poor.
Despite being fertile, and physically attractive enough that men aren't revolted by my appearance, I do not have children. In fact, I refuse to ever produce children, even if that would grant me a meal ticket in the form of child support. I refuse to engage in such unethical behavior merely to live.
To digress a bit - I abhor the hideosly malfunctioning child support system and consider it to be yet another thing, like credit cards or income tax, which victimizes poor and rich alike. Many people, even those who were once prosperous, are being impoverished by this system through no fault of their own. Here's an informative web page which points out the myriad ways in which the child support system is broken: http://www.nfja.org./positionstatement/childsupportbudgetcuts.shtml
Legally, up to 65% of someone's earnings can be garnished for child support, as this page states: http://www.dol.gov/compliance/guide/garnish.htm
How are people supposed to live with up to 65% of their paycheck stolen, and another large percentage robbed for income taxes, Social Security, etc.?
Back to my example.
I did very well in school while I was there, especially on tests - in spite of the fact that I didn't really have the endurance to deal with the prolonged boredom. (Which also makes it difficult for me to last at a 9-to-5 style job - though I don't think I'd be able to make enough money even if I _could_ last at such a job, because I probably can't get a job with more than minimum wage. So, I have to admit, technically I myself am not "working poor" - since I'm not working, except for the websites I do for free to help out relatives, etc.)
Once I left school, I found it very easy to get a GED, getting excellent grades on the tests. Also, my SAT scores were 730 on the Verbal test and 510 on Math. For a while I had hopes of going to college, but among other factors, the idea of going into massive debt discouraged me. (Unfortunately, I ended up dragged into massive debt anyhow due to the precarious financial situation of my family, who _are_ working poor).
I am, and have always been, an absolute Puritan when it comes to alcohol, drugs, and so forth. I'd be willing to bet money that, chances are, _you_ drink more alcohol than I do. If you are a "social drinker", or even if you only have a drink at a bar or a party once a decade - ha, I win!
I am also not a particularly hedonistic sort of person in general. I find it very difficult to guiltlessly "have a great time" when the world is filled with misery, poverty and suffering, even though there's very little I can actually do about it due to my limited resources.
I subsist on the willingly-given support of my parents - but if there were no one who would willingly give me support, I would willingly live honestly on the streets rather than steal, lie, or cheat for a so-called living. I am unshakeably dedicated to my morals - otherwise I probably wouldn't be poor.
So, though I am definitely not someone who has made all perfect decisions in my life, I am far from what you assumed of me.
I could understand your anger better if I had been proposing that the rich be _forced_ to give the poor money. I'd be angry about that myself.
But instead, I was proposing that the rich only do so if they really want to. I would never want money from anyone who doesn't genuinely want to give it to me, or from anyone who can't genuinely afford to do so. (If only credit card companies, Uncle Sam, etc. felt the same way I do).
Also, by "rich", I didn't mean people who only have a "little bit of a nest egg". By rich, I meant people who are so colossally rich, $1,000 or even $10,000 is like 10 cents to them.
Forgive me for perhaps making assumptions about you, but, since you made assumptions of me, I'll assume I have the same liberty.
Judging by what you said, it sounds like you really need all the money you can manage to get, and getting it has been a hard struggle. To me, you sound very embittered over having had to work so hard and sacrifice so much, merely to get a "little bit of a nest egg", which is continually being fleeced by Uncle Sam's extortion in the form of income tax, etc.
And I don't blame you at all. One reason being because I absolutely loathe the income tax, and anything else that robs from people's hard-earned wages, such as involuntary contributions to Social Security, insurance, etc.
In my opinion, the income tax is pure stealing and extortion, and it's just as egregious and unjust when done to the rich or middle class as to the poor. The essay by Frank Chodorov, "The Income Tax: Root of All Evil" expresses many of my outlooks better than I could. http://www.mises.org/etexts/rootofevil.asp
I think the income tax should be abolished. Our country got by just fine before 1913 (when the 16th Amendment, supposedly authorizing income taxes, was put in place).
In my opinion, the poor are far from the only ones who are being victimized and oppressed here.
I also believe you shouldn't have had such a hard life - no one should. You have admirable fortitude and I envy you that.
I wish you continued prosperity, and I also hope you don't still see me as some kind of subhuman scum. Best wishes.