Sunday, January 15, 2012

A Conversation on Poverty in America

It's worth it to watch the entire two hours and 40 minutes of a Tavis Smiley conversation on poverty in America that ran a few days ago on C-SPAN, but there were three passages that compelled me to transcribe them for my own pack-rat purposes and your reading pleasure.

First, there was Suze Orman. Yes, telegenic financial advisor Suze Orman -- not someone I spend a lot of time with. I was surprised at her presence on the panel, and even more surprised about what she had to say. Smiley asked her what she advocates for low-income people, and she responded:

The one thing that I think is important, that I'm trying to work on right now, and I do not know if I will be successful -- it seems like many people do not want me to be successful with this endeavor -- but the main thing I want to change in the United States, that truly affects the poor are FICO scores.

...Because without a good score, if you happen to own a car, your car insurance premiums are high. Landlords will not rent to you. Employers are starting not to hire you.
If you want to do anything to change the situation, good luck getting a loan at all, and if you happen to get a loan, it will be at the highest interest rates possible. So the main thing that I am trying to do… is to get people who pay in cash or on debit to get FICO scores. Today, if you pay in cash or you pay on a debit card, it doesn't report to a credit bureau, and therefore you do not have a score. You are a nonentity. You do not exist in the financial system at all, people.

So if you want to just pay your way in cash, you don't count. You count big time if you run up your credit cards and you pay the minimum payment due every month. Then you really count because you are paying their ways with 18, 19, 25 and 30 percent interest. Late fees. They need to keep you in the credit trap.

I am trying to change things so that a debit card creates a FICO score, so that we can get rid of credit fees. (Applause.) So that we can get rid of credit cards all together. Because when you're tempted to do something, when it comes to money, you tend to. So I want to get that temptation out, and I want to go back to being an America with a cash society for your everyday things. Then build up your FICO score so that you can one day have a car, you can one day have a home… you're now an entity because you've been paying with what you have, versus with what you wish you have.

And all I can tell you about this is that I have many many people who do not want me to succeed. There is serious money in credit cards. There's serious money in prepaid cards that charge exorbitant fees…. In two years, if this works, you will be able to have a credit score simply if you have a debit card.
(The Orman clip can be seen here. This talk coincided with Orman's launch of her Approved Card, a prepaid debit card that allows the unbanked to operate in the increasingly card-based financial world we live in. She's facing criticism for this card, but it's clear her intent is to use it to get FICO scores for people who go cash/debit-only. Former Pioneer Press business writer Gail Marks Jarvis today mostly lauded the card, while pointing out that people would be better off getting a credit union account with no monthly fee.)

Michael Moore had something to say about efforts to suppress voter registration and voting that was just about as far from Newt Gingrich's recent thoughts as you can get:
The reason why the Republicans and the 1% are trying to get all these laws passed this year to repress the vote, to make it more difficult to register and to vote, the reason for doing that -- it's kind of a positive, optimistic thing -- why would they be doing that if they believed that the majority of America agreed with them and Fox News?

If they honestly felt that the majority of America believed in Wall Street, believed in the 1%, believed in the right wing, why -- instead of passing voter suppression laws, they'd be passing laws putting voting booths in every aisle of every Walmart all across the country. They'd want as many people voting as possible if they thought that this was a country that supported those values. But it isn't. The majority of Americans are with us.
(The Moore clip can be seen here.)

And finally, something from Barbara Ehrenreich, author of Nickel and Dimed: On Not Getting by in America, talking about the American ideal of "moving up" based on merit:
There's no ladder going up. There's a greased chute going down. One of the examples -- employers don't like to hire people with poor credit scores. What is that about? They don't want to hire people who need money?
They also don't like to hire people who are unemployed. And that is so weird I have to say that again....

So once you start down, you get going faster and faster. Your debts mount. The possibility of legal trouble increases. If you apply for food stamps in most states, your information then enters the criminal justice system computers. If there is a warrant out for you, that's it, they've got you. Because our social welfare programs are part of a dragnet to bring in poor people, aka "criminals."
(The Ehrenreich clip can be seen here.)

Other participants in the panel were Majora Carter, MacArthur genius grant winner and founder of Sustainable South Bronx, Cornel West, Vicki Escarra of Feeding America, and Roger Clay of the Insight Center for Community Economic Development. I understand the whole conversation is going to be on PBS early this week, so if you can't get the web links to work, you might want to check for it on broadcast.


Ms Sparrow said...

Wow! That's a lot of insight into the unseen hazards in our economy!

Blissed-Out Grandma said...

Wow is right. The ladder vs greased chute is an easily grasped and memorable image for our country's current condition. I hope Suze Orman's card succeeds, and I hope Michael Moore is right about people not buying into the right's rhetoric. In most societies, the downtrodden eventually rise up.... And my word verification is "protistr."