My last post reminded me of another episode of The Journal. The idea that we benefit from free trade principles because it lowers prices is a tactic that a rich man uses to mollify the working class into believing that right-wing economic policies will benefit them.
In August of 2008 the Journal ran excerpts from a documentary by Exposé titled The Business of Poverty. I’m going to post a little bit of the transcript here then a few of my thoughts. You can follow the link above to watch the full episode, or follow this link to the transcript. So here goes:
SILVIA CHASE:Brian Grow is a reporter in Atlanta for BUSINESSWEEK magazine. It was late 2006 when that advertisement with a slew of asterisks caught his attention. Soon after, a think tank report arrived on his desk. As he read it, Brian grow began to connect some dots.
BRIAN GROW:Matt Fellowes, at Brookings Institution, published a report called “From Poverty, Opportunity” how more companies were looking at low-income Americans as a very attractive business opportunity.
Sort of defies conventional wisdom that the low-income consumer is a segment of the market, where most companies wouldn’t want to play. And it was pretty powerful and fascinating.
MATT FELLOWES:I’ve estimated in my research that among the bottom 25 percent of households, they’re collectively bringing in about 650 billion dollars every year.
So you can imagine why an amount of money that large is attractive to a great variety of businesses, from large financial services companies to new, uh, to entrepreneurs looking for innovations to serve this market.
SILVIA CHASE:That the poor can be lucrative to big business was intriguing enough to the reporter. But Matt Fellowes’ evidence for that case was even more so. The Fellowes report noted that wages have been stagnant for years; to compensate the working poor are buying items small and large by taking out loans from companies all too happy to lend them the money at a very high rate.
MATT FELLOWES:Lower income families tend to pay higher prices for nearly every basic necessity from groceries to the price of a car to the price of a mortgage.
MATT FELLOWES:Between 1989 and 2004, they borrowed about 240 percent more debt than they did in 1989. So there is this enormous increase in the amount of debt held by low and moderate level income houses.
SILVIA CHASE:BUSINESSWEEK may be considered an unlikely publication to take on a poverty investigation — based in New York City, it is a magazine that, like the corporations it covers, has traditionally viewed the world from the top down. But the think tank report hinted at a story a business magazine could embrace: an industry based on poverty, serving 25 percent of the American population.
PAUL BARRETT:The aha moment was that we could show a marketplace could be exploited, both in the neutral sense of exploited, just profits could be found; and exploited with the connotation of people being taken advantage of.
SILVIA CHASE:One player which for BUSINESSWEEKepitomizes what the magazine calls ‘the poverty business’ is the company that sold Roxanne Tsotsie her car: the company with the bright orange and blue signs. It’s called J.D. Byrider.
BRIAN GROW:When you go to a J.D. Byrider lot, if you’re paying attention then what will strike you as different, is that there are no prices on the cars. Which for most people would be what, how, why?
PAUL BARRETT:Their method is quite creative. The interest rate depends on what they think they can get out of you. So they basically debrief their customers to a much great degree than you could imagine.
SILVIA CHASE:The company uses sales techniques that brought lawsuits from Attorneys General in Kentucky and Ohio alleging that customers were being misled. The Kentucky case created a public docket that included J.D. Byrider corporate papers.
This is sick. Taking advantage of the poor is, and always has been, incredibly easy. There’s a reason there are so many passage in scripture intended to protect the poor. The poor are not typically the parasites in a community, it’s the rich that take advantage of the poor and the working and then tell them that they aren’t working hard enough when they aren’t rich. I have a serious problem with this kind of thing. What to do?
Life is not getting better for the poor anywhere in the world. Could it be that the ideology that tells us that wealth is a morally good thing, in and of itself, is corrosive to families, communities, economies and people’s lives? Are we freer when markets, rather than people, control things? Can democracy bring about the necessary conditions to rein wealth in to the benefit of the public? I hope it can.
Grace and Peace,
Jared
Anglopressy 