Broke USA by Gary Rivlin
June 1st, 2010Title: Broke USA
Author: Gary Rivlin
Publisher: Harper Business (2010)
Confession: I have a fascination with payday loans. There is a storefront right by the Chipotle that we like to eat at. Almost every time we eat there, I try to lure someone into a discussion about them. I’m not exactly sure why I am so fascinated with them…I suspect it is because they make me sad. So when I saw that this book was coming out, I thought it would be a good chance to experience them without having to drag my wife into a discussion. I think she likes it better this way.
Broke USA: From Pawnshops to Poverty, Inc. – How the Working Poor Became Big Business by Gary Rivlin is an interesting book about the relatively short history of the poverty business. Not that companies catering to poor people is new…just that the explosion of these companies has been recent. This book does a pretty good job of tackling a number of different topics but keeping it within a main theme. Payday Loans, Sub-Prime Lending, Pawning, etc… are all covered in the book.
One aspect of the book that I really liked was that Rivlin introduced a couple of major players early on in the book, and they continue to have appearances throughout. That kept the book consistent and familiar. While there were obviously a lot of different people referenced in the book, I feel there were two main characters: Allan Jones, who owns one of the largest payday loan companies in the country and Martin Eakes, the founder of the Center for Responsible Lending.
Now, one aspect I didn’t really appreciate in this book was the heavy handedness of the author. I don’t think he leaves any doubt about his personal feelings on the subject. The chapter describing Jones tries to subtly paint Jones as an arrogant, bad person. Unfortunately, it isn’t very subtle. The initial chapter on Eakes, however, basically describes him as a freedom fighter/angel from heaven (in different words though!). There is no doubt which character is the protagonist and which is the antagonist.
Of course, this isn’t to say that I don’t agree with Rivlin on who the bad guys are…I was just expecting it to be a little more even to allow the reader to make an unbiased opinion. That said, I think one of the main points of this book is that the “Crash of 2008″ can’t be blamed on one entity. People like having a singular “bad guy” to blame when things go wrong…but that just isn’t realistic…especially in situations like this. I think Rivlin is very fair…I think he makes it clear (though I don’t remember him saying it outright) that EVERYONE involved is to blame.
The banks should not have been so shortsighted to buy these mortgages. The smaller initial lenders should have been more honest with the actual costs. And while probably not directly related to the sub-prime crash…the payday lenders should also be more honest on what the actual costs are to a loan. It may only be $15 for a two week loan…but most people don’t pay it back that quickly. It becomes a never ending cycle of fees.
I know a lot of people have a lot of different opinions on these issues…and I am not here to convince anyone of anything. Your opinion is just as valid as mine is (well, maybe just a bit less valid!).
I am interested if anyone here has knowledge of payday loans, or has taken one out themselves? I would like to hear your side…because, as you know, I am always up for a discussion about this!
Rating: 3.5 out of 5
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Disclosure: I received a free review copy of this book and this post contains affiliate links.
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June 8th, 2010 at 11:03 am
I heard a snippet of an NPR interview with the author yesterday on their Fresh Air segment. I only heard about 5 minutes of it, but it sounded really interesting. Time to add this book to my to be read pile.
June 10th, 2010 at 7:18 am
this book’s so timely. not only is this country’s GDP going to be surpassed by it’s total debt load, but there seems to be a crippling short term memory about mistakes committed about “leaders” just even a few years ago. what’s said in this book is sort of shocking, really sad, and just all around tragic.