100 Cars are lined up for next week’s sale. Every single one of them is a repo from a very successful title pawn company… and every one has a story to tell. The histories on many repos really begin with the license plates. Disabled Veteran… Educator… its amazing how many cars and trucks were once owned by folks who really made a difference in this world. It doesn’t matter though. After 25 percent monthly interest rates and numerous attempts to get their clients to borrow even more money… their car is now forfeit. And so is their freedom.
The auction will be taking place in Clayton County, Georgia. A community that is an amazing microcosm of black America. The malls are packed. Jobs are scarce, and big box stores that were once rare to non-existent in the community are now all over the place. But to get to any of them you need a car. Any vehicle will do. The county has no more public transportation and the tax base continues to be affected by numerous factors.
One of them is the laissez-faire attitude towards companies that prey on the poor and the desperate. A 25 percent monthly interest rate for three months, offered by virtually every title pawn in every corner of this community, can easily compound to a loan that is too difficult to pay for those who are already struggling. Even if that loan is only based on a 40 percent wholesale Black Book Value for the vehicle (which is typical), a $1000 loan will stay at $1000 only so long as the debtor is able to pay $750 within those first three months.
A loan default usually results in a repossessed car that can be worth many more times the original loan value. Interest payments, repo fees, administrative fees, and the inevitable auction expenses often result in a healthy profit for the title pawn company. They also result in destitution for the borrower. In Georgia you can offer a loan at a rate of over 180 percent a year. 25 percent for each of the first three months and 12.5 percent for every month thereafter… and in perpetuity.
Most states and communities outright ban title pawns due to the corrosive impact such usurious loan rate can have on the community. Wisconsin is the latest state to regulate the interest rate to a still semi-usurious 5 percent a month. That measure took years and a very tough battle with an army of highly paid title pawn lobbyists.
But other Americans (mostly in the South and Midwest) are not nearly that lucky. In some towns the number of title pawns on the main strip can outnumber the fast food joints and closed down mom-and pop businesses. The impact this has is both local and nationwide.
Any American without a car is very limited in their ability to find employment, and this reality costs money for everyone. Taxpayers pay for more unemployment benefits and with fewer Americans able to afford a home, property taxes go up as well. The government has to provide more welfare services for these citizens. More debt is inevitably issued by all levels of government to pay for it all. With more debt come interest payments and even less money over the long-term to cover deficits that are now rising dramatically. But there’s an even more depressing and sinister side to it.
That is growth. Folks who were once successful need to be able to build on those once firm foundations, and without a car, that just isn’t going to happen. The handshake and the face-to-face time most small businesses need to get going simply can’t happen when their car is in a repo lot instead of a driveway. Neither can they easily care for their families. It’s a vicious cycle of keeping people in poverty, and in a place like Clayton County, it represents a new American reality.
The question is obviously… What to do? You can ban title pawns outright. With all the debate about free enterprise, it’s interesting to note that certain businesses that are seen as parasitic can actually do a lot of good. It’s estimated that well over 100,000 vehicles will be repossessed by title pawn companies this year. But hundreds of thousands of Americans will also be able to pay off those loans. Should they be banned? Regulated? Left to the vagaries of the market?
Most states have chosen to ban title pawns, or to regulate them to a degree where the interest rate is far lower than the 187.5 percent annual interest rate currently charged in Georgia. In private conversations with title pawn managers, I’ve been told that many of these firms can usually enjoy gross profit margins that are well in excess of the amount loaned. This may be one of the reasons why a place like Clayton County is filled with title pawns while the overall employment and home ownership rates continue to decline in areas where these pawns are prevalent.
Then there is the issue of local favoritism. The local title pawn auction I mentioned earlier was illegally operating in Clayton County for nearly eight months. Over a dozen auctions of approximately 700 vehicles took place with no business license, no permanent office or phone at the location, and no voice recording of the three bids required by state law to liquidate the cars. Ironically enough, it took place in the back of a closed down GM dealership that once had employed hundreds of people over the past decade.
Even after they were warned about their activity by a county official the prior year, they continued to liquidate cars, the law be damned. Last Tuesday, someone informed the county of the activity and the place was shut down. After over a dozen illegal sales and that second visit by a county official, something truly unexplainable happened.
They got their license. It’s amazing that any business with such a long history of illegal activity would be so quickly accommodated. The neighboring City of Morrow, which had been the prior home for that auction before it was discovered, threw them out. In fact, the location of the auction had been moved three times once it came to Clayton County. So how can anyone justify the issuing of the license in light of this? Would an unlicensed driver or struggling business be given the same treatment?
There are a lot of responsible citizens throughout our communities who try to provide for their families. In their work, and in their dealings, they pursue an opportunity to build a better life. As Americans celebrate Independence Day, the question that must be considered is whether the poor, tired and huddled masses of generations past would have sacrificed it all had they known that our government would so easily whore itself out to the powers that be. It is a question worth considering…
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Wow, a portrait of creeping dystopia.
What is happening to America?
Honestly? Class warfare. Not outright, in-your-face, oiled-with-the-blood-of-the-underclasses/bourgeoisie, but a more subtle form.
In the west in general and the United States in particular we’ve developed a virulent, unsustainable economy that’s premised on growth of wealth for the wealthy. You can see this in the rise of GDP and average wage, while the median has remained stuck and the spread become frightening. You need a middle class to drive this kind of economy, and it’s the middle class that’s being hollowed out.
This kind of thing is where it starts: develop urban infrastructures that benefit corporations and city tax coffers (in the short term) rather than people. Use debt and credit as a substitute for earning power. Cut the social safety net for tax breaks that mean nothing to the bulk of the working populace.
Where it ends, eventually, is indentured servitude or poverty riots. And it’s stupid, because if we stopped chasing the easy, short-term buck, made some painful decisions about paying for services (at all levels of society: personal, corporate and government) and started being progressive, we could probably fix this.
Unfortunately, people are short-sighted, government plays to that by raw populism and corporations, well, keep doing what they do.
@ psarhjinian / July 5th, 2010 at 12:39 pm “…Unfortunately, people are short-sighted, government plays to that by raw populism and corporations, well, keep doing what they do…”
agreed with almost everything you said, right up until the end. “people are short-sighted,” but the more salient reality in all this is that people are corruptible and far too many of them have been, and continue to be, corrupted. and they are playing the rest of us for a bunch of chumps. corrupted capitalism is crapitalism and the vast majority of us are getting sh!t on. repeatedly.
‘the people’ can no longer count on government to protect their interests. ‘the people’ need to respond and mount a spirited defense of all they hold dear or it will be – methodically, systematically – taken from them.
I hate to sound like Public Service Announcement (PSA) from the seventies, but knowledge is power!
These title loan places are not targeting Blacks, they’re targeting the ignorant. And there is no shortage of ignorant/irresponsible people in our country.
Interesting story, Steven.
DT
I spent a few days in Georgia last week, and these title pawn companies advertise like crazy on TV. Kind of sad, that people would be so desperate to fall for this scam. I suppose you could argue that they are no different than a pawn shop, but again, a terrible way to take a loan.
It is unfortunate that schools don’t teach basic money management. That would solve a lot of problems.
I’m not sure this is something the schools could easily teach. It’s not just a matter of knowledge, it’s a way of seeing the world.
Many people, even those who currently have plenty of money, have a very short-term outlook. They deal with their immediate needs, and assume that they’ll be able to deal with the consequences when they have to.
That’s exactly what needs to be taught!! How hard is it to teach kids to balance a checkbook, prioritize finite amounts of money so as to pay bills on time, perhaps explain the costs of children to discourage them from taking on the responsibility when they are not ready. Perhaps teaching kids the value of saving for their wants vs using credit cards and debt so that sudden expenses or loss of a job doesn’t create such hardships. There are plenty of real life examples that could be used to educate children in the proper respect for money, but no one does it. Why??
While it wasn’t a set part of the curriculum, I learned some basic money management in school, as should anyone who can pass basic algebra. Compound interest is still a part of the math curriculum I would assume, and it doesn’t take too much extrapolation to take the lessons there and apply them to real life.
Ask these people if they finished school and there is your answer as to why they have no concept of managing finances.
Just goes to show that there is a sucker born every minute. The reality is how do you get the ignorant to not damage the rest of society in an ethical, humane manner.
Car ownership and use exist within a social context. One of TTAC’s strengths is that articles like these look at this larger context and not just at cars themselves.
There are people who believe the automotive era is drawing to a close; that personal, on-demand, long-range transportation for the masses is not a sustainable model. Perhaps the TTAC editorial staff would consider soliciting guest articles from the likes of Howard Kunstler? I’m sure there are other examples, but he is the one who first comes to mind.
There’s also the problem of infrastructure maintenance. Consider this article: http://wtopnews.com/?nid=600&sid=1995119. Even if people keep their cars, it may become more difficult to actually use them.
Car ownership, in a free market, is inexpensive. At every part of the process, multiple competitors keep prices in line – from the car dealers, to insurance, to gas. Car ownership is under assault by by the anti car establishment, forcing higher gas prices through environmental polices, onerous licensing requirements that discourage new drivers, high car prices through mandated technologies – all in the name of “helping” people. The goal is to shift people to public transportation.
This flawed policy is manifesting itself in Connecticut. car ownership is very expensive here – insurance, gas, driver’s licensing and license plate costs. Our state has developed a state subsidized bus to take casino workers from where they live Hartford to the casinos. The state charges $15 per week for the service, but the real cost is much more and now the state wants to drop it, leaving these people in the lurch. So, we kicked people out of their cars and force them into public transportation, then don’t charge enough to cover the cost and end the service. So are these people supposed to quit their jobs and go on welfare? Is that the goal?
Of course, the whole idea of a state subsidized bus for a select group of citizens is flawed from the start. These people should be car pooling, or their employer should be footing the bill, not the state.
“There are people who believe the automotive era is drawing to a close; that personal, on-demand, long-range transportation for the masses is not a sustainable model”
^However, there is no realistic or workable alternative
Car ownership, in a free market, is inexpensive
No, it isn’t. Much of the costs of owning a car are externalized. Imagine if you had to pay, directly, for things like roads, traffic enforcement, safety, medical, fuel security and so forth.
That said, there’s no such thing as a “free market”. It’s about as fictional a term as “real communism”, and for the same reason: people are involved. There’s no way you can prevent a market from being manipulated by it’s more powerful participants (at which point the market is not free) unless you have regulation (at which point the market is not free).
“No, it isn’t. Much of the costs of owning a car are externalized. Imagine if you had to pay, directly, for things like roads, traffic enforcement, safety, medical, fuel security and so forth.”
We do pay for these things. It’s called taxes. We pay income tax, property tax, gas tax, tolls. All to cover the expenses of infrastructure. Government is regulating to the effect of increasing our direct costs of auto ownership, while undertaxing for the upkeep of the roads – which is why the roads/bridges are in such disrepair.
Who would agree that a government run public transporation system is more cost/time efficient than individual transportation? Only those with a narrow, urban mindset. Try to apply the public transporation model to the larger, rural areas of the country and see what the costs look like.
I have no problem with the government charging the correct taxes to cover the proper maintenance of our road infrastructure – even if it means taxes go up. I just don’t want the government using tax policy to influence my personal choices of transportation.
I know it’s called taxes. By virtue of anything being tax-funded we’re already out of the free-market sphere and into collectivism.
That was my point: there’s no “free market”, only degrees and nuances of collectivism. Arguing about what your tax dollars should or should not support based on subjective, populist wants is exactly the paving stones on the road to hell that is, oh, California’s budgetary woes.
Personally, I don’t want my taxes to pay for all sorts of things I find ideologically unpalatable, but I’ve come to realize that nickel-and-diming the tax system is a way to ensure miserable service for everyone
I think we can all agree that we want paved roads and safe bridges, yet we can’t seem to accomplish this. I think we can also agree that we don’t want millions of uneducated people sitting home on the government dole, yet we seem to have got this down perfectly.
+1 1169HP
“…the question that must be considered is whether the poor, tired and huddled masses of generations past would have sacrificed it all had they known that our government would so easily whore itself out to the powers that be…” I would like to think not. That this is the kind of crap our country was trying to get away from. We have a lot of these title loans here in the Houston area, and more going up all the time. I don’t believe in regulating free enterprise out of business, and there is a lot of money being made from these places by enough people, so I don’t see much doing the right thing happening. Maybe people will quit using them but more than likely it will be a situation where the “victims” will seek some sort of restitution for these so-called unfair business practices, and the taxpayers will foot the bill.
“There’s class warfare, all right, Mr. (Warren) Buffett said, but it’s my class, the rich class, that’s making war, and we’re winning.”
Good thing the flame rule ban expired at midnight! This would have made quite the string of comments.
These types of “businesses” prey on the ignorant, yes. But they also prey on those in the lower economic bracket that for whatever reason, find themselves in a financial predicament. While I don’t think a ban on the industry is right course of action, I do feel that any lending institution should have a mandated cap on the maximum rate that they can charge. Like a certain percentage tied to prime for example. It is easy to say who cares about these people, but the first paragraph of the story says it all. People who once contributed to society in a productive way are now being used to the point that they are broken in both cash and spirit. How can one who can no longer get to work hold a job? Once you are so far behind you just don’t care anymore; you have nothing left to lose. That’s why poor people often drive without insurance…there is nothing to take from them if they get caught. So we pay in uninsured motorist rates.
Something to keep in mind that in general, it is expensive to be poor. Banks are not interested in people who can’t keep a good balance in their accounts. So they pay check charges, they get caught in overdraft fees, etc. No mobility means the local store in the ‘hood instead of large stores with competition. That means a much higher cost per unit. What would be a small surprise bill for most means a choice about feeding the family. Prevention takes a back seat to buying food, so health problems become widespread. I already can see the comment posted “yeah, but why do the “poor” have top tier cable and a 52 in TV?” Well, some might, but that goes back to making poor choices. And no, those who work should not subsidize those poor choices, but neither should an opportunistic sc**bag get rich on them either.
What has happened to Clayton County? Years ago, I used to live in Forest Park, and was pretty familiar with the area that you describe. It sounds like it has fallen on hard times.
Having lived in the greater Atlanta area, I can attest to how necessary a car is for daily life. The rapid transit system, MARTA, was constrained by each individual municipality’s acceptance or denial to let it operate in their territory. You need a car to get around, period.
Your article brings up the old argument about how much regulation is necessary in a “free” market, and apparently the State of Georgia feels very little is appropriate. The ad hoc “licensing” of the title broker in question brings to mind stories of the old boys network. A little greasing of the palms goes a long way, for sure.
What is happening to America?
Nothing unusual. People have been getting screwed forever.
What is highly bothersome is apparently Clayton County officials don’t give a shit.
Clearly the larger issue is corrupt politicians and civil servants.
Reports say the economy is so bad Exxon-Mobil laid off 25 Congressmen!
+1
Gardiner, I heard the same thing. But let’s not fret. I understand it’s really only a relatively small percentage of the pols they have on payroll and the laid off have been assured that they will be the first to be rehired.
“There are people who believe the automotive era is drawing to a close; that personal, on-demand, long-range transportation for the masses is not a sustainable model”
Yeah well they never lived in Florida
Potent article. I see a lot of this, too, and am always surprised at how many predatory lenders there are, especially when it comes to cars. The only thing I can think of is to do everything we can to educate people of the pitfalls when dealing with these places, to somehow show them that the terms and interest rates of most of the loans will have them ultimately playing far more than they imagine, and often that these deals will put them into a circle of debt that will be difficult to escape. But I’m not sure how to do that. That may be a hopeless task, but I think we can do far more in this respect.
I’m also always surprised how so many people are so willing to take advantage of people, especially ones in serious need, and presumably find a way to live with that.
Every nation has its own mythology to keep its people in line. The USA is no different. From the very beginning, the USA has been governed by the rich elite at the expense of the lower classes all while promoting the idea that people have “rights” and “democracy.” See Shays’ Rebellion for proof: http://en.wikipedia.org/wiki/Shays'_Rebellion
BTW, the South, in particular, never gave up on the idea of slavery. The institution just became more subtle, more like the indentured variety without the master’s responsibility. A pervasive Calvinist mindset helps lay the blame on the slave.
Happy Independence Day everyone!!!
A book that explores this phenomena is Broke USA: From Pawnshops to Poverty, Inc. by Gary Rivlin.
It covers many of the traps those who need a few bucks are lured into. Auto title loans is just one of them.
Those “huddled masses of generations past” left nations in which most commercial activities were under the control of aristocracies and self-protective guilds and cartels. The word “copyright” reminds us that the King once possessed that right, and only by royal permission could one print a book.
When I lived in Georgia I learned the phrase “poor people have poor ways”. That is, the poor tend to make bad decisions. For example, low income people are more likely to smoke. Or pile their grocery carts high with soda pop and snack foods. Education can help but won’t guarantee good judgment.
Georgia should tighten regulation of such outfits as title pawn shops. But regulation can have bad consequences. The taxi business is usually cartelized by government restrictions. If individuals were free to offer jitney service, the poor and working class would have another good transportation option.
That is, the poor tend to make bad decisions. For example, low income people are more likely to smoke. Or pile their grocery carts high with soda pop and snack foods.
One area of corruption that’s never mentioned. – the Food Stamp program. It’s a borderline subsidy to the snack / junk / sugar / instant food industry. Heck, I’d vote for increasing the food stamp allowance if the increase were restricted to fresh fruits and vegetables.
This plan started in 1980. It was called “trickle down economics.” This is what has been the trickle down part = the middle class being eliminated, lowered standard of living, destruction of public education – it all has led to the expansion of predatory lending like these title pawn loan sharks. Thank Reagan, Bush, and Clinton for leading the way to the end of prosperity for Americans. This current one has not even mentioned trying to fix it – END NAFTA, fix America!
As much as I’d like to take a poke at Reagan, he’s not really the start of this: it began much earlier, generally with the beginning of Liberalism’s fall in the US under Kennedy. The corner was truly turned under Nixon.
The United States has never really had a grassroots socialist movement (the rest of the world doesn’t have one, either, what with the rise of the “New Left” under Tony Blair) which is unfortunate because this really is their kind of cause to champion. The libertarians on the right aren’t really equipped or willing to address this kind of issue until it gets really bad.
When we talk about “predatory” lending we fail to identify those that are “preyed” upon, as if they are complete innocents. In some way they are. Usually (although there are always exceptions), people with a large amount of debt, and those frequenting these sorts of establishments are those who cannot understand the concept of delayed gratification. They are often not very smart (IQs at least one SD below the mean, often more), and are likely living on some sort of welfare dole (or several forms). They probably don’t have much of an intact traditional family (something that’ typically’ is a wealth builder). Their “event horizon” is about an hour, maybe a day or two at most. And so on and so forth.
I recently was driving through a section of town populated by these types of folks. There was a tire place that was hawking “rent to own” tires with large flashy chrome wheels (larger than nature intended). I thought to myself, who would enter into something so ridiculous as rent to own tires? I looked around, and it was all clear.
At the same time, and from a middle class perspective, these sleazy pawn dealers are pikers compared to the big boys: like those running the US Federal Reserve.
To add to mrpresley’s points – it’s those same people who breed like rabbits, ensuring more and more just like them. I was really struck by this the other night – a group of us were out to dinner at a nice restaurant, eight guys in their early to mid 40s, all childless, all of us well-paid professional types. NONE of us have any intention of having children! Yet we all are exactly the sorts who could afford to have children and raise them properly, send them to good schools, etc.
I live in a relatively poor working-class town (paper-mill town where the mill is all but closed), I see “babies with babies” all over the place, usually more than one dirty urchin in tow. Mom or Dad covered in tattoos, smoking away as they push the stroller down Main St. – this is a town where you only walk if you don’t have a car.
This is not entirely new, but that these people now depend largely on credit, instead of having a reasonable job, makes matters worse.
We, as a culture, are using credit to stimulate buying because we’ve gutted real wages.
We used paid people a decent figure and made it hard for them to borrow. Now, not everyone is smart, capable and forethinking. Not everyone can be, and it’d be unhealthy if they were because you need, to paraphrase Huxley, “Deltas” who can do delta-level work that Alphas and Betas wouldn’t do, or would go nuts trying to. Not only does paying people a reasonable wage give their offspring a better chance to get out of the gutter, not giving them credit in lieu of wages would prevent them from making things worse.
Have you ever wondered why this happens? Ever wondered why consumer spending is so paramount? Consumer spending ensures the rich get richer, but so does keeping the wages the rich pay low. Credit is the popsicle-sticks-and-glue solution to the question of “How do we maximize revenue?”
The funny thing is, we have alpha and beta people grousing about deltas’ wages out of some kind of intellectual superiority complex. Things wouldn’t be quite so bad, I suspect, if everyone was paid an good living wage, rather than participating in a race to the bottom and never, once, wondering who pulled the trigger on the starter’s pistol.
To all you three. I recently went to Italy, and was shocked to see personally what I kinda knew from the stats I read on the MSM. The population is getting old.
My baby (or toddler, since he’s 17 months old) was treated as a superstar everywhere we went. Which was right. My wife and me reasoned that this behavior must have to do with the fact that there are very few kids.
I have been told by one iranian, that in the industrialized areas of the country a similar situation like the one reported by krhodes1. He himself was one of them, at least his family got kids after he was past his 30′s.
Back in Venezuela, I see the opposite situation. Many kids. But the “middle class” here tend to have less (usually no more than 2) than the lower classes.
I live too much close to my tastes to the lower classes, and one of the reasons they tend to have many babies is ignorance, prejudice, the women specially think that they can tie a man with a baby and tend to have many (from different fathers).
Many of them have a way better cell phone (local status sign) than me, but their refrigerator content sucks.
And there’s people inside the factories lending money at 10-20% per month, in towns, in barrios… I borrowed money from one of them and can tell you is not good. Workers usually have so much debt that these guys take most of their vacation and final year bonuses payments.
I don’t know over there, but here the poor go to drink like there’s no tomorrow every Thursday/Friday, spending most of their salary (paid weekly) and leaving very little for food, bus, etc… then they have to borrow, have more than one family, etc…
I learned most being supervisor of workers.
psarhjinian is right, people deserve to earn a decent salary for their jobs. But if socialism is the same rubbish Mr. Chavez is imposing here, ummm no, I’d rather pass.
There are a number of reasons the poor tend to have many kids. Someone who was brought up without a strong nuclear family doesn’t necessarily feel the shame in having multiple children out of wedlock from different partners that someone who was brought up in a traditional family would. People tend to play by the rules of their particular society, and if in the ghetto everyone is having lots of kids indiscriminately, and there is no societal shame or taboo on it, a huge factor preventing that behavior no longer exists.
Added to that the short term financial gain that comes from having more children, after all more kids equals a bigger welfare check, and you have
women popping out babies to have more money to blow on fake nails and hair weaves.
The only solution I see to the problem is a complete overhaul of our childrens’ services and welfare laws. Welfare should first and foremost be a very temporary solution, a few months at most, and should depend on proof that you are actively searching for employment. If at the end of the allotted time you don’t have a job, the checks should stop. Now, obviously it wouldn’t be fair to subject the children in such homes to starvation, but to break the cycle we need drastic action – if the parent can no longer support the children, even if it is due to the welfare checks being stopped because the parent won’t go get a job, then the children need to be taken in as wards of the state. We can set up boarding schools to house and educate these kids away from the ghettos and give them a decent chance at a successful life. Yes it may be more expensive up front, but in the long term turning around entire communities through breaking the cycle will save more money than it costs to take those kids out of the destructive environment.
@NulloModo
i absolutely agree!
not only that, but i’ll up your recommendation with
the following excerpt about german unemployment benefits
from wikipedia (http://en.wikipedia.org/wiki/Hartz_concept)
“To receive payments, claimants must agree to a contract subject to public law. This contract outlines what they are obliged to do to improve their job situation, and when the state is obliged to help. Unemployed persons may be forced to accept any kind of legal job. This compulsion is restricted by constitutional rights, like freedom of movement, freedom of family, marriage and ‘human dignity’. If taking on a specific placement is deemed reasonable by the responsible agency, not applying will result in a reduction or even complete suspension of the appropriate payment.”
Sure. Mr Hartz’s (the disgraced hooker-scandal HR director of VW) “forced to accept any kind of legal job” concept culminated in women being forced to accept a job in a whorehouse – or lose their benefits. After all, prostitution is legal in Germany, and a whorehouse is a legal enterprise.
Hartz is a member of the Social Democrat Party and the German metal workers union. He received a two year suspended sentence for his involvement in the Volkswagen scandal. His authorship of the “Hartz Modell” remained unpunished. May that be a lesson to those who idly use the word “socialism.”
Nullo,
“The only solution I see to the problem is a complete overhaul of our childrens’ services and welfare laws. Welfare should first and foremost be a very temporary solution…”
Step out of your time machine. Clinton and the Republican Congress already did this. 14 years ago.
Reagan invented the concept of the welfare queen out of thin air, by the way. He was pretty famous for doing stuff like this, and many people knew it but didn’t care.
Modern American welfare is for no more than 2 straight years and a max of 5 years over your lifetime. The states are allowed to be more strict if they want to be, and one of the reasons for the increase in free preschool for poor kids is that if a single mother is not able to claim that child care issues are the reason she cannot work then the states are allowed to be even stricter still.
There is a time limit on Temporary Aid to Needy Families (TANF) – the program that most people think of when they talk about welfare. But these time limits are enforced by the states, and what beneficiaries must do to stop the time clock from ticking varies from state to state. In some cases, just looking for work, as opposed to actually working, can waive the time limits.
Government assistance also includes food stamps, free health care for children (CHIP) and Medicaid. (And then there is the free school lunch program, and, for many areas, free breakfast and dinner, too.)
There is no time limit on these programs. Plus, you have a baby, and you hit the jackpot. While there may be time limits for ADULTS on welfare, there is no time limit for children. They remain eligible for taxpayer-provided services until they hit the age of 18.
Funny thing is that people who have actually worked with the poor – such as my wife, and her former co-workers in social services – often make Rush Limbaugh sound like a member of the editorial staff of The Nation. Meanwhile, posters whose actual real-world experiences in working with the poor could charitably be described as “limited” believe that Ronald Reagan made up the idea that recipients of government benefits exploit the system to their advantage and prefer relying on it, as opposed to getting a job and bettering themselves.
I would suggest that these uninformed posters talk to my wife. They’ll actually know what they are talking about.
Chicago Dude –
2 years is still entirely too long. A period of maybe 6 months, with 1 year total in a lifetime would put a bit more urgency to the job search.
Geeber –
I am sure there are some people more than happy to live on the dole, as well as others who find it distasteful and want to be self-sufficient. However, as long as there are enough programs out there that make it easier to live off of handouts than it is to take an unpleasant job and work your way out of a bad situation, far too many people will choose to live off of the handouts.
One of the biggest arguments I always hear about illegal immigration and the loss of jobs it brings is that the illegal immigrants do jobs that the rest of us don’t want to do. That very well may be true, I certainly don’t want to work out in the fields picking tomatoes or peppers, clean restrooms at rest stops, or wash dishes for minimum wage, and someone who has the choice of something like that vs. waiting in line at the welfare office for a check might just choose to live with the indignity and keep picking up the checks. When we take those checks away though, and that person is faced with the option of doing nothing and not eating, or spending the day working hard for little pay but being able to put food on the table and paying the rent, that second option will start to look good once they get hungry enough.
Not to sound heartless, I know that many of the poor in this country didn’t have the most chances growing up, and were born and raised into bad situations without good role models, but this is still America, and there is still plenty of opportunity for those willing to work for it. If someone can sneak across the border in the middle of the night without knowing the language without any proper identification or means to lawful employment and still work hard every day and eventually make something of themselves, there is no reason that people actually born here with actual citizenship can’t do it.
We used to have usury laws…but they were “deregulated” so that state laws were now subservient to federal laws. Every credit card has a 30% default rate now too.
You know what’s funny, or sad, depending on how you look at it?
About the only thing Jesus Christ ever went whoop-ass on was usury. Everything else—homosexuality, capital punishment, adultery, collectivism—don’t get mention in the New Testament. Usury does.
And yet a vehemently Christian nation gets it’s knickers in a twist about everything except usury.
The sadder thing is that more people tend to ask themselves WhoWouldJesusHate rather than WWJD?
I’m glad (and a little surprised!) most of these comments are intelligent – I believe that car people are smart, despite Brock Yates’ long unjustified tenure at C/D.
That said, a (thankfully precious) few comments are severely backwards and incorrect. Stingray, lmike, european – I’m talkin’ to you.
African Americans may be over-represented (as only 12% of population) victims of usury, still the vast, vast majority are white. Perhaps the great-great-great grandchildren of the same people who worked the farms of the slaveowners with blacks.
One of the ways we allow ourselves to be exploited is the belief and proselytization of self defeating dogma.
Nonsense – like perverted, misleading comments on “culture of poverty” and malthusian “too many babies” bullshit – is useless. Equally disabling are the bullshit affirmations – “I’m middle class and I don’t have any children, I’m so smart!” – in the place of real analysis.
No one deserves to be a victim. 400% interest is a fucking crime. A government that allows that is a criminal accomplice. A course in “money management” won’t solve the problem when some people spend their lives/careers figuring out how to game and trick, see http://www.gotchacapitalism.com/.
Of Course. there is a large difference between “renting money out” and exploitation.
@ Sasha Abayomi.
I wrote about the situation I see in Venezuela, my country. And find some parallels with what I have seen here.
I never made a reference about stereotypes related to black americans (I not even going to bother using the PC term African American, sorry). And being black is not an stigma, it’s perfectly normal like being white, yellow or brown. What you have in your mind is what defines you, not your skin color.
I myself had to recur to usurer to get some money for one urgent payment I had to make. And I can tell you it’s killer. Not an experience I’d like to repeat. And I’m educated, etc…
I saw many of my workers suffer because of this, and didn’t like it (still don’t). But I can’t make them change their lifes, only give advice and hope they follow it. Sometimes their living conditions are so harsh (poorly built houses in dangerous land, crime…) you don’t even want to go into the deepness of it.
I remember one about 6 years ago that was earning minimal wage, had 11 kids and was the sole income in his home. He made jokes about his refrigerator content (water and light, like a big square with a fountain), but is hard to laugh at something like that. And that’s one case.
psharjinian: About the only thing Jesus Christ ever went whoop-ass on was usury. Everything else—homosexuality, capital punishment, adultery, collectivism—don’t get mention in the New Testament. Usury does.
Wrong. When the woman who was about to be stoned by the Jewish leaders for adultery was released, Jesus specifically told her,
“Go and sin no more.” Which, we can conclude, means don’t commit adultery (a sin) again. That sounds like a condemnation to me.
Homosexuality was not a sanctioned activity in Israel at that time, which is why Jesus never said anything about it. Based on your standard, he approved of spousal abuse and pedophilia, because he never said anything about those activities. Jesus condemned the sins named in Mosaic Law that Israelites were either ignoring or winking at. They weren’t ignoring homosexuality (you could be punished by death for engaging in it) or even adultery. (As shown by the example of the woman about to be stoned for being caught in the act – Jesus commented on it because they brought her to him, and demanded to know what he would do. He also probably wondered why the man wasn’t being stoned – Mosaic Law called for both women AND men who engaged in adultery to be sentenced to death.)
Homosexuality was condemned in the Old Testament, and Jesus specifically said that he came to FULFILL the Law, not replace it. (Contrary to your assertion in an earlier thread that the New Testament was meant to replace the Old Testament – this is incorret. The New Testament is the fulfillment of the Old Testament.)
Those activities were also condemned by the Paul in his epistles to the various churches.
As for capital punishment – it was sanctioned by Mosaic Law.
Sasha Abayomi: Nonsense – like perverted, misleading comments on “culture of poverty” and malthusian “too many babies” bullshit – is useless. Equally disabling are the bullshit affirmations – “I’m middle class and I don’t have any children, I’m so smart!” – in the place of real analysis.
Yet your post contains no analysis, just a bunch of ad hominen attacks substituting for any facts. And please note that there is a culture of poverty in this country, and both liberals and conservatives have written about it. And, if you can’t afford to have one children without taxpayer assistance, then giving birth to one constitutes having “too many babies.”
Anyone who ignores this is either woefully ignorant or willfully clueless.
Does anyone know if these pawn shops exist in Canada? Europe?
Or is this an American thing?
joeveto3,
These types of pawnshops do exist in Canada. They are known as payday loan providers. In some provinces in recent years there have been some regulations strengthened to police such parasitic vermin, but you can still get yourself in a world of hurt very quickly. What always amazes me is how many people get themselves into this type of trouble. My employees are unionized, make good money and have all the usual benefits. Twice in the last 5 years I have had payday loan companies attempt to garnishee wages from one of my employees. Both made $50,000 plus per year, both young guys without a lot of real responsibility, and both with all the toys like quads, snowmobiles, new trucks etc. At least they had the assets to sell and get out from under.
I’m pretty much a conservative, free market kind of guy but this type of business enterprise is unconscionable and should be regulated into oblivion.
@for all those guys that yell “CLASS WAR”
it’s always easy to blame someone else for
your personal failures.
like black america, blaming slavery for all their
misfortune of today, while it was 1865!! when slavery
was abolished.
“like black america, blaming slavery for all their
misfortune of today, while it was 1865!! when slavery
was abolished.”
^I’m gonna have to disagree there. While it is true that slavery was abolished in 1865, there was state sanctioned(mandated)segregation and oppression of Negroes. From about 1600 to about 1965 or so Blacks had no rights and were treated as subhumans. My generation(born 1971)is the first to even have a remotely equal chance in life. To expect to reverse the effect of generations being Jim Crow-ed into oblivion in one lifetime borders on lunacy.
The question remains: where will people who need short term loans go?
Every economy needs lenders of last resort. I’m not happy with the usurious interest rates, but often a car is the only “bankable” asset the working poor have.
If you drive the pawn shops out of business, you’re virtually inviting loan sharks to operate, so whatever regulations there are should make sure that the loaners can actually turn a profit.
Actually, it’s not the pawn shops that are the ones who most frequently exploit the working poor. Utility companies, banks, government agencies, all have policies and fees that are deliberately set up to generate revenue from those on the economic cusp. Rich folks don’t overdraft many checks or have to pay the gas company $50 to turn the gas back on.
BTW, if you notice, in the story, a private business can only be so corrupt. To be maximally corrupt, you need the cooperation of government.
Ignorance has it’s price, but unfortunately we all pay for it.
“Any American without a car is very limited in their ability to find employment, and this reality costs money for everyone.”
This is a very slippery slope. This is the same reason that our DUI and “no insurance” laws are so lax compared to other developed nations.
These sleazy pawn places also have a huge presence outside Georgia military installations (Fort Benning / Stewart). I wouldn’t doubt the business and legislative history of Title Pawns has its roots in lending to the military.
Financial ignorance and a certain mindset conspire to make these businesses.
Edit: Note this was not intended as a slight to our service members. I just recall my own indestructible attitude as a young infantryman (flush with bonus cash) – after getting through 3 months of Benning… I was once young and dumb…
Georgia is filled to the brim with stupid. This article is a tiny tip of multiple icebergs. Here is exactly why, broken into easy bits:
The year is 1988:
The natives, while they weren’t rocket surgeons, were basically a cool bunch of people living out their rural lifestyle. No problem.
Then the Job Boom exploded. That brought in people ONLY interested in money, making money, turning Georgia into the worlds biggest strip mall. No museums, no institutions, no neighborhoods. The houses had to be built quickly.
The kids born in 1982 or so get to grow up in this mess only learning from the culture of sales. There is a fast food joint every fifty feet. This must be normal to them. And, since everything easily visible is less than 20 years old, any history is deleted. These kids are literally the first generation. To them, nothing exists before 1988 because nothing is older than that.
Well, it gets better. Like an uncontrolled cancer, buildings are built so quickly on the antiquated road system that you cannot walk or ride a bike anywhere. Video game consoles become louder and cheaper. You don’t leave your house for any reason because there is nowhere to go and do things. You don’t care much about school either, as the low skill set jobs are plentiful and you are sure to get one.
As the boredom increases you dabble in controlled substances. Meth begins to override a lack of dentistry as the number one cause of rotted teeth. If your lucky, you can stick to weed and maybe keep your looks, but live in a brain fog. Jerry Springer begins to look really interesting.
And then as quickly as it gets built, Georgia dies. It is now 2008. You get left with the carcass of a city and scampering consumers willing to do anything for a buck. Their jobs pay well but they are in debt because there are already so many places to spend their money. Their houses are made of tin and paper. The children don’t talk to the parents because they are nestled deep in their social networking systems, the cheapest form of entertainment.
They are also need some fast cash.
Do you need a title loan? We are here to help!
They don’t know better. Only those who grew up outside it see the difference.
yes sure, its societies fault, some fatass kid
is rather playing nintendo than reading a book.
sure, blame everyone else, why the hell not…
btw, Jerry Springer *ROCKS* :-D
http://politicalhumor.about.com/library/images/blpic-morans.htm
Nice article on msn btw.
The MANY costs associated with mega-MILLIONS of illegal aliens has an especially pronounced impact upon USA working-poor citizens.
Sadly, divide-and-conquer is one of the tactics desired by those within the USA who are waging class war against the populace.
I believe the “powers that be” desire to install a true oligarchy some day.
I fear the Union is doomed.
What’s remarkable, is that if any of us were to approach one of these individuals, and offer them, say, $900 for their $4000 vehicle, they’d most likely tell the person making the offer to go pound salt. But in essence, with these pawn brokers, they’re doing just that.
I’m also amazed at what appears to be a lack of competition between the pawn brokers and other lenders. I mean, I’ll gladly lend these folks the money at a rate lower than 400%. I might even be thrilled to loan them the cash at 75 or 100% interest. Heck, I might even go a lot lower than that. We’re talking secured loans.
So why such a high rate? Is it the inability or unwillingness of the borrower to shop for a lower rate? Is shopping for a lower rate too high of a concept? Is this the high math and finance of which we speak?
More selfishly, should I quit my job and set up shop down south making loans at a paltry 75% interest rate? Or will I be run out of town by the folks who are charging 400%?
Someone earlier made a point regarding the lack of a social taboo (in many circles) when one has a child out of wedlock, or many children out of wedlock with many different fathers, or men impregnating women and not supporting, providing for, loving the resulting children. I would argue there is a similar dynamic taking place when it comes to personal finances. These folks live in a not-so microcosm of society where lack of personal financial management is acceptable. The 20″ rims, expensive sunglasses, big car stereo speakers, etc., the perceived financial success is valued more than (real) financial security, by most in that society.
The cat with the nice clothes and the bling is more apt to be given a shot at impregnating one of the local ladies than would be the gentleman with a steady job, who works long hours, takes the bus, and wears a work uniform.
I believe this is a result of capitalism operating at the lowest socioeconomic levels. We convince folks it’s more important to have things than to be able to “do things.” Folks’ skill sets are dwindling, their ability, desire, and opportunity (jobs exported) to provide for themselves spirals downward correspondingly, and their self-esteem goes right down with it.
In the end, the only thing they really (think) they have, is what they can wear on their backs or the steering wheel they can grasp with their hands. The entire mentality is pathetic, but it’s fueled by so many different factors (sociological, political, economic, etc.), it’s so complex, I don’t know what can be done to address it, beyond something drastic and probably illegal, and most likely not acceptable to the ACLU and the targets of the “fix” themselves.
Lest anyone be mistaken, I don’t for a second see this as a “black” issue, but rather a “poor” issue. There is a “poor” mindset in our society, and it’s growing daily. Families are either broken, or they never get off the ground. And this recession, and utter decimation of the middle class is pouring fuel on the fire of despair.
In the end…we ALL pay for it. And yes, 400% is criminal and should be dealt with accordingly.
“I’m also amazed at what appears to be a lack of competition between the pawn brokers and other lenders. I mean, I’ll gladly lend these folks the money at a rate lower than 400%. I might even be thrilled to loan them the cash at 75 or 100% interest. Heck, I might even go a lot lower than that. We’re talking secured loans.
…
More selfishly, should I quit my job and set up shop down south making loans at a paltry 75% interest rate? Or will I be run out of town by the folks who are charging 400%?”
You won’t be run out of town for charging 75% interest. You will more likely just go out of business. Loaning money to poor people is really really really risky. Yes, it is a secured loan, but do you have the ability to secure the secured assets? Mr. Lang had a piece not too long ago about the costs of doing so…
@Bertel
Ja mein Gott Bertel, hast du den Artikel
überhaupt gelesen? Niemand wird doch gedrängt eine
Prostituierte zu werden!! Nur reine Panikmache.
Use debt and credit as a substitute for earning power. Cut the social safety net for tax breaks that mean nothing to the bulk of the working populace. That may be a hopeless task, but I think we can do far more in this respect.
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