SOCIETY

Gary Rivlin's "Broke, USA," an exposé of pawnshops and check-cashing stores

Sunday, June 27, 2010

BROKE, USA

From Pawnshops to Poverty, Inc.

How the Working Poor Became Big Business

By Gary Rivlin

HarperBusiness. 358 pp. $26.99

Remember the episode of "The Sopranos" when that sad-sack poker player, awash in debt, must let Tony take over his sporting goods store and repossess his son's car? From about 1990 through the economic crisis of 2008 and beyond, many poor Americans had to submit to similar practices with the blessing of Wall Street as the federal government looked away. "There are any number of strange but seemingly lucrative splinters that are part of the poverty industry," Gary Rivlin writes in "Broke, USA." It's an exhaustive expos? of pawn shops, check-cashing rip-offs, payday loans, auto title loans, rent-to-own schemes, subprime mortgages and other "equity stripping" means of getting poor people into debt they can't carry, then taking their houses and cars while derivatives backed by those bad loans are sold to investors.

Rivlin, a former New York Times reporter who has also written a book about Bill Gates, tries to remain objective as he interviews the usurious architects of payday-lending (one, who operates 1,300 outlets, complains that making $10,000 an hour isn't enough) and the activists trying to protect impoverished communities from their influence. Eventually, however, he must take a side. "I began to liken the entire Poverty, Inc. industry to those energy companies whose strip-mining destroyed vast tracts of wilderness areas," Rivlin writes. "Short of government intervention, the consumer advocacy side didn't stand a chance." Some desperate person somewhere is always ready to pay $1.20 next week to borrow $1.00 today, and the recession may end up boosting the business Rivlin so painstakingly details. But at least the Soprano family never asked for a bailout.

-- Justin Moyer


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