Thursday, October 25, 2012

Booknote: Broke USA

"Behind every great fortune there is a great crime." --Attributed to Honoré de Balzac

This is my review of the book as I posted it on my GoodReads profile. It is a book that, while a bit exhausting at times, due to the exhaustiveness of coverage in the topic, it is one worth reading. I think it is also a relevant book for this election season. When you think of the "1%," keep in mind they are not all high finance tycoons. Many of them made their fortunes exploiting the poor one small predatory loan at a time. Poverty is a big business in the United States for those with little to no conscience willing to exploit the poor. By the way, the epigraph, which has gained some fame from The Godfather using it as epigraph too, seems appropriate given how the merchants of poverty have made their fortunes. It may not have been illegal, but it was still a crime.

The review: 

Broke, USA: From Pawnshops to Poverty, Inc. - How the Working Poor Became Big BusinessBroke, USA: From Pawnshops to Poverty, Inc. - How the Working Poor Became Big Business by Gary Rivlin
My rating: 3 of 5 stars

I did like this book, but I am not rating it higher because, well, "I liked it" but I did not "really like it." It is not because the book is bad. Far from it. If a list is ever compiled of the books that must be read to understand the 2008 financial meltdown, this book has to be among the top two or three. Also, the book is required reading to understand why the poverty industry-- those who profit from the plight of the poor-- are thriving in the United States. So, why only rate it "three stars"? Because the book is exhaustive, but it is also exhausting.

Rivlin takes us on a gran tour of Poverty Inc. He covers just about every player: payday loans, rent-to-own, those tax refund loans, pawn shops, subprime mortgages and a few others I cannot recall at this moment. He delivers human interest stories, interviewing a lot of victims, but he also sits down with some of the tycoons of these companies. Though Rivlin strives to be fair, in the end, the tycoons pretty much hang themselves. As we read, it is clear that what they do is far from noble, and we are reading a tale of greed gone awry. The damage these companies caused is such that it will be felt for years. And even if you are tempted to feel bad about one of these tycoons, once you learn of their trade conventions, where they trade secrets on how to squeeze the poor even more, their lobbyists, and their underhanded tactics, you won't be left feeling too much sympathy for them.

The thing is that there were very early warning signs, signs that many people either failed to see, or they refused to see them because the money being made was very good. In the end, the companies may be bruised, but they are not totally out yet. We can only hope more education can help the poor find better options. Because in the end, these companies thrive because society and businesses have simply enabled the erosion of a solid middle-class turning it into a working poor class with no other choice than to fall into the trap of the subprime lender or other poverty exploitation merchant. Rivlin, in addition to telling the story, raises some very good ethical and moral questions that we as a society really need to consider if we want to move forward.

The book includes a good set of notes for documentation for those who may be interested in learning more. The only catch, as I said, is that Rivlin strives to cover so much that after a while reading these tragic stories of exploited people just becomes too exhausting. Add to it you may get angry (as a decent human being) when you read about these predatory lenders and their deceptions, and you have to read this book a little at a time. However, it is an important book, and I think it is one more people should read. Plus, in an election season, it may be a relevant one as well.

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