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eBook Debt for Sale: A Social History of the Credit Trap epub

by Brett Williams

eBook Debt for Sale: A Social History of the Credit Trap epub
  • ISBN: 0812218868
  • Author: Brett Williams
  • Genre: Business
  • Subcategory: Biography & History
  • Language: English
  • Publisher: University of Pennsylvania Press (May 25, 2005)
  • Pages: 160 pages
  • ePUB size: 1727 kb
  • FB2 size 1606 kb
  • Formats doc docx lit rtf


In "Debt for Sale" Brett Williams examines the history of debt in America and focuses on the many tenets of the Debt Industry. Debt is not only a financial phenomenon but also a social and cultural one heavily embedded into .

In "Debt for Sale" Brett Williams examines the history of debt in America and focuses on the many tenets of the Debt Industry. The Debt Industry is a very sophisticated, organized, methodical, and politically powerful industry in America. Close to 70% of the American economy is now propelled and highly dependent upon, consumer spending.

Debt for Sale - Brett Williams.

Philadelphia, PA: University of Pennsylvania Press, 2004.

Debt-trap diplomacy is a term used as criticism of foreign policy of the Chinese government. E. Paul Durrenberger. Published: 1 June 2006. by University of California Press.

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Too many of us carried too much debt. Brett Williams is Professor of Anthropology at American University. She is the author of Upscaling Downtown: Stalled Gentrification in Washington, . com you agree to our Privacy Statement. A respectful treatment of one another is important to us. Therefore we would like to draw your attention to our House Rules.

Books by Brett Williams. Upscaling Downtown: Stalled Gentrification in Washington, . by Brett Williams (Author). Category: History, Science & Nature. Category: Science & Nature.

Credit and debt appear to be natural, permanent facets of Americans' lives, but a debt-based economy and debt-financed lifestyles are actually recent inventions. In 1951 Diners Club issued a plastic card that enabled patrons to pay for their meals at select New York City restaurants at the end of each month. Soon other "charge cards" (as they were then known) offered the convenience for travelers throughout the United States to pay for hotels, food, and entertainment on credit. In the 1970s the advent of computers and the deregulation of banking created an explosion in credit card use—and consumer debt. With gigantic national banks and computer systems that allowed variable interest rates, consumer screening, mass mailings, and methods to discipline slow payers with penalties and fees, middle-class Americans experienced a sea change in their lives.

Given the enormous profits from issuing credit, banks and chain stores used aggressive marketing to reach Americans experiencing such crises as divorce or unemployment, to help them make ends meet or to persuade them that they could live beyond their means. After banks exhausted the profits from this group of people, they moved into the market for college credit cards and student loans and then into predatory lending (through check-cashing stores and pawnshops) to the poor. In 2003, Americans owed nearly $8 trillion in consumer debt, amounting to 130 percent of their average disposable income. The role of credit and debt in people's lives is one of the most important social and economic issues of our age.

Brett Williams provides a sobering and frank investigation of the credit industry and how it came to dominate the lives of most Americans by propelling the social changes that are enacted when an economy is based on debt. Williams argues that credit and debt act to obscure, reproduce, and exacerbate other inequalities. It is in the best interest of the banks, corporations, and their shareholders to keep consumer debt at high levels. By targeting low-income and young people who would not be eligible for credit in other businesses, these companies are able quickly to gain a stranglehold on the finances of millions. Throughout, Williams provides firsthand accounts of how Americans from all socioeconomic levels use credit. These vignettes complement the history and technical issues of the credit industry, including strategies people use to manage debt, how credit functions in their lives, how they understand their own indebtedness, and the sometimes tragic impact of massive debt on people's lives.

Comments: (6)
Opimath
This is a well researched book that is worth the time to read. It provides valuable insight into why debt has taken over so many people's lives and the affect that it has had on our society.
lucky kitten
How do you rate a must have book for class? It was okay. I had to buy the book for class and for some quizzes. It did help with the quizzes.
Heraly
In "Debt for Sale" Brett Williams examines the history of debt in America and focuses on the many tenets of the Debt Industry. Debt is not only a financial phenomenon but also a social and cultural one heavily embedded into U.S. society. The Debt Industry is a very sophisticated, organized, methodical, and politically powerful industry in America. Close to 70% of the American economy is now propelled and highly dependent upon, consumer spending. As fixed expenses (expenses we have to pay) increase and take more and more out of the average American's income, Americans are increasingly, spending and borrowing --> borrowing to spend. A high percentage of Americans are now using debt for "cost of living" and not soley for crass, mass consumption. This has become increasingly common for the middle class.

There's also the ignorant and myopic:

In 2007 the ARM mortgage payments will increase we'll be hearing more and more of the people who used them. :)

Most of us have been in these debt situations. I certainly have. But the degree and size of this situation is what has been increasing dramatically, in particular over the last 2 decades. Debt can help us in many ways (Good debt). However, one question to ask is: how did the *size* (per capita debt ratios) get so big?

Williams discusses how debt is now arguably one of the most pervasive aspects in American society. Yet it seems real discourse regarding it is rarely if ever discussed. If there is discussion, it remains on the superficial level of TV talk shows, and newspapers and web articles that redundantly regurgitate "How to get out of debt" or "How to dig your way out of the hole." "Cut up your cards, pay off the higher interest rates first, establish a budget, itemize all expenses." And, "cut down on the Cappuccino from 5 days a week to two. You'll save X amount of dollars per year this way."

Perhaps the question should be not "how" (to dig out of it) but "why" it is there in the first place. Per capita has debt grown so much in the last 20 years that simply 'living beyond one's means' is not the main factor, for many. Further anchoring (revolving) debt into lifestyle normalcy is potential employers running credit checks on non-financially sensitive positions being applied for by job applicants.

In many instances, the FICO score has become an almighty determiner about "who a person is." Further confusing the already bemused, are the Self-anointed pop culture gurus and money management helpers who rarely if ever ask the "why" questions, as well. Of course there is good debt, and borrowing can help us in many ways. Obviously, most of us cannot pay cash for certain necessities, such as the car we need to commute to work. (In the U.S. a car is a necessity in most areas.)

Excluding the Mortgage and Car Loan, (and in many instances including these 2 debts) one could look at the concept of American debt this way: the systematic engineering to encourage, promote, and place Americans, in debt. Many organizations benefit from this. Corporations prefer to hire and employ people with revolving debt payments. This provides the control and leverage to the employer. The employee is the dependent party in the relationship. The employee works for income and then pays creditors, over a period of months and/or years, while the principle of the debt balance slowly whittles away. The employer holds a disproportionate amount of power in the relationship because the worker has given Self-Determination, or choice, up.

As for the non-interest payment treadmill, whatever happened to pay as you go? We sign contracts from everything from cell phones, to gym memberships, to Karate lessons, now.

The government likes and wants to keep its citizens in debt. Employees will work longer hours and be more efficient. And productivity improves statistically, when workers have certain minimum Per Capita Debt Ratios.

The author notes the normal concept of having debt begins during or right after high school, and usually extends until death. Debt has been internalized by a high percentage of Americans. It is a cultural norm.

As for the recent explosion in education costs since 1999, how does the U.S. government address it? By loaning more money; increase the debt ceiling.

Williams also asserts the poor get targeted more, proportionally. This is true, however everyone on the socio-economic spectrum gets targeted to acquire, increase, and maintain debts. The poor are the ones that are affected the most severely. The poor get hit more than than the socio-economic groups above them in many ways.

This book examines the social history of debt and the credit trap. And although credit card companies can seem predatory, how will "debt forgiveness" advocated in this book, help? Would these people change their behavior? And, would they be able to reduce their fixed expenses? Could debt forgiveness just exacerbate the problem for a sizeable percentage of the population? We also know forgiveness won't happen.

This book can motivate some to get off of the treadmill if they choose to, if it's not too late.
Gribandis
It might be our biggest problem, but Americans still are not talking about it. Although high levels of debt have become widely prevalent in the United States, American social conventions prohibit most discussion of personal financial troubles. Instead, this downward spiral into debt silently worsens during economic hardships, through "people's desperate, sometimes misguided, often inescapable efforts to maintain the illusion of a middle-class standard of living." (43) With 1.2 million people filing for bankruptcy in 1996, (60) the lack of a productive conversation about issues of debt and credit is startling.

Debt for Sale: A Social History of the Credit Trap is Brett Williams' attempt to change that. Her anthropological work indicts the booming debt industry for its unscrupulous role in creating massive profits for lenders by hammering poor Americans deeply into debt. Rather than blaming the indebted, she attacks the lending institutions for their predatory tactics and deceitful business practices, which she insists brought about such unnecessary adversity for so many people.

Brett Williams is a professor of anthropology at American University in Washington D.C. She has lived in the nation's capital since 1976, where she has researched a variety of topics related to urban politics and poverty. She is also "an unwilling participant-observer in the social relations [she describes]." (7) Having used credit cards since arriving in D.C., she has experienced difficult times of debt and makes no attempts at neutrality in this work. This aspect is refreshing, as the author devotes her entire energy to exposing the damage wrought by the credit industry without pretending to be objective. With that said, the author backs up her statements with carefully researched detail, so despite its lack of a neutral stance, this book is still firmly based in experience and statistics.

Debt for Sale is a powerfully surprising presentation of the credit industry as an exploiter of poorer Americans. Williams explains that, unexpectedly, credit companies prefer consumers who can not pay off their entire balance every time it is due. Instead, they seek those who are unable to handle their usual balance and impose "a creative plague of penalty fees for every little malfeasance imaginable." (33) Because these punishments provide so much profit for the banks, people who pay too faithfully are avoided by companies like Capital One, where "your account may be cancelled if you don't charge enough or if you pay too fully and faithfully." (50) This seemingly illogical structure sets the tone for the book as a meticulous revelation of the many ways that banking methods defy reason.

This book compellingly describes an American economy based in a self-reinforcing set of inequalities, slanted heavily toward the rich. Not only do the banks market their products less aggressively toward people more able to pay, they also give those people better credit cards deals. Rather than hassle the wealthy with higher interest rates, lending institutions unload these burdens on already strapped debtors. As Williams tells us, "this flow of money from the poor to the rich is just one example of how middle- and upper-class economic privileges are sustained by the poor." (113) While banks could easily lessen the burden on the poor--who often need credit to get through medical emergencies or lay offs--they instead cater to the wealthy, leaving the lower classes in even worse shape. Illuminating these trends of inequality with true stories, Williams succeeds in bringing her readers to deeply question the methods and motives of these lending giants.

Her work is strengthened further by its comprehensive analysis of fringe banks, which exploit the poor while enjoying monstrous profits. Fixtures in impoverished areas, they engage in "the most outrageous, expensive and quasi-legal transactions." (98) Check cashers, payday lenders, pawn shops and rent-to-own businesses all benefit from taking advantage of poor Americans who need a little extra cash to get by. For example, Rent-A-Center, the largest rent-to-own store in the United States, made $100 million in profit in 2003. (104) Compounding these issues, these institutions also further impoverish and disenfranchise members of poor communities, "leaving them with no records of proof of payments, no ongoing relationship to build up a credit history, and in greater personal danger from carrying cash." (99) Sometimes charging annualized interest rates over 1000%, the contrast between these booming institutions and the suffering they profit on brilliantly highlight the inequalities caused by debt today.

Williams' chapter on the attempts of banks to establish a presence on college campuses, to gain access to largely uninformed potential customers, widens this book's scope by describing another aspect of manipulative lending businesses. Seeing students as a "current and future source of profits," (67) banks fight to develop a large client base among younger and younger students. In this section, Williams expertly incorporates the stories of three separate college students as she traces the notion of the credit card as a rite of passage gone wrong, through their parallel stories that begin with a credit card in college and end in "an adult life saddled with seemingly intractable debt." (68) The true accounts given here and throughout the book allow it to resonate on a personal level, something not often found in works on economic subjects.

Overall, Williams' work breaks down stereotypes of debtors as "the poor, the welfare state, greedy and impulsive women, or racially marked and foreign others." (4) She draws attention to the real causes of these issues, pinpointing the big banks that encourage states to abandon anti-usury laws and governmental agencies to keep regulation low, so that profits stay high. Her focus on the way that "credit cards work to obscure, reproduce, and exacerbate divisions of class, race and gender ... in a patronizing, asymmetrical economy of debt" (6) brings the reader to want change in this industry of exploitation. As Williams explains, "we are all participating in the same economy; we are all connected" (123) and subjected to the dangers of this unsustainable growth in credit. As a result, her revelation of the previously hidden aspects of the debt industry represents an important first step in starting a discussion about these collective issues.
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