Monday, August 20, 2007

Great Barbara Ehrenreich article--"Smashing Capitalism", about the collapse of the payday loan industry

Now this is what I mean by having an attention span wide enough that you write about more than just the minutia of the daily Bush drama:

"The American poor, who are usually tactful enough to remain invisible to the multi-millionaire class, suddenly leaped onto the scene and started smashing the global financial system. Incredibly enough, this may be the first case in history in which the downtrodden manage to bring down an unfair economic system without going to the trouble of a revolution.

First they stopped paying their mortgages, a move in which they were joined by many financially stretched middle class folks, though the poor definitely led the way. All right, these were trick mortgages, many of them designed to be unaffordable within two years of signing the contract. There were "NINJA" loans, for example, awarded to people with "no income, no job or assets." Conservative columnist Niall Fergusen laments the low levels of "economic literacy" that allowed people to be exploited by sub-prime loans. Why didn't these low-income folks get lawyers to go over the fine print? And don't they have personal financial advisors anyway?

Then, in a diabolically clever move, the poor - a category which now roughly coincides with the working class -- stopped shopping. Both Wal-Mart and Home Depot announced disappointing second quarter performances, plunging the market into another Arctic-style meltdown. H. Lee Scott, CEO of the low-wage Wal-Mart empire, admitted with admirable sensitivity, that "it's no secret that many customers are running out of money at the end of the month."

1 comment:

Anonymous said...

I went into a wall mart once … it’s one of the reasons I am against socialism.

The idea of someone trying to make me equal with these people was too much for me to bear.

For three months after I entertained notions of euthanizing 70% of the human race.

But after a few months in M A L I B U my goodwill toward all men returned.

I hope their will be no wall marts in your socialistic paradise.