May 14, 2007


IMPEACH BUSH


IMPEACH CHENEY

RIPPING OFF THE POOR

Poverty has never been so attractive to big business as it now. There is a burgeoning industry in extracting money from the poor via payday loans, higher interest rate car loans, higher interest rate mortgages, and high interest rate credit cards. Any time I watch TV, especially on the weekends, I see informercials for cars promising easy credit or that bad credit not a problem. One company deceptively advertises payments by the week or biweekly, rather than by the month, because the monthly payment would be horrifying. A lot of people probably don't know what "biweekly" means. This article by Brian Grow and Keith Epstein is at www.businessweek.com:

Armed with the latest technology for assessing credit risks—some of it so fine-tuned it picks up spending on cigarettes—ambitious corporations like Byrider see profits in those thin wallets. The liquidity lapping over all parts of the financial world also has enabled the dramatic expansion of lending to the working poor. Byrider, with financing from Bank of America Corp. (BAC ) and others, boasts 130 dealerships in 30 states. At company headquarters in Carmel, Ind., a profusion of colored pins decorates wall maps, marking the 372 additional franchises it aims to open from California to Florida. CompuCredit Corp., based in Atlanta, aggressively promotes credit cards to low-wage earners with a history of not paying their bills on time. And BlueHippo Funding, a self-described "direct response merchandise lender," has retooled the rent-to-own model to sell PCs and plasma TVs.

The recent furor over subprime mortgage loans fits into this broader story about the proliferation of subprime credit. In some instances, marketers essentially use products as the bait to hook less-well-off shoppers on expensive loans. "It's the finance business," explains Russ Darrow Jr., a Byrider franchisee in Milwaukee. "Cars happen to be the commodity that we sell." In another variation, tax-preparation services offer instant refunds, skimming off hefty fees. Attorneys general in several states say these techniques at times have violated consumer-protection laws.

Some economists applaud how the spread of credit to the tougher parts of town has raised home- and auto-ownership rates. But others warn that in the long run the development could slow upward mobility. Wages for the working poor have been stagnant for three decades. Meanwhile, their spending has consistently and significantly exceeded their income since the mid-1980s. They are making up the difference by borrowing more. From 1989 through 2004, the total amount owed by households earning $30,000 or less a year has grown 247%, to $691 billion, according to the most recent Federal Reserve data available.

HUNGER IN THE UNITED STATES

In the early 1960's Michael Harrington wrote a book about a hunger in America called The Other America. JFK, then campaigning for the presidency, was appalled when he saw the reality of poverty in West Virginia. When JFK took office he tried to address poverty and LBJ took dramatic steps to combat poverty. Right-wingers then started snarling about the "welfare state." They want it both ways. They love having a class of poor people who are available to do low wage jobs. But heaven forfend that the poor get any assistance in even basics like food and shelter. It's "socialism," you see. This editorial comes from The New York Times and talks about the reality of hunger in the United States. The editorial is at www.nytimes.com:

If you think people do not go hungry in America, you’re wrong. At last count in 2005, 35 million low-income Americans — about a third of them children — lived in households that cannot consistently afford enough to eat. Since 2005, the situation has most likely become worse. Last year, real wages for low-income workers were still below 2001 levels. This year, job growth is slowing and prices are rising.

And each year, the federal food stamp program — the bulwark against hunger for 26 million Americans — does less to help. In large part, that is because a key component of the formula for computing most families’ food stamps has not been adjusted for inflation since 1996. Over all, food stamps now average a meager $1.05 per person per meal.

Bolstering food stamps must be Congress’s top priority in this year’s farm bill, the mammoth legislation that covers the food stamp program.

February 23, 2007


IMPEACH BUSH


IMPEACH CHENEY

SHAFTING MEXICO'S POOR

I find this story interesting on several levels. I worked for Mission Foods, a division of the Gruma Corporation, for several years. Mission makes tortillas, chips, and Mexican pastries. I heard mention of the head of Gruma, Roberto Gonzalez Barrera, when I was there. He was called "Don Roberto" and his portrait in the conference room reminded me of Don Corleone. Gruma has major ties to Archer Daniels Midland, and both companies are doing quite well at the expense of Mexico's poor, who rely on tortillas to survive. This article by Tom Philpott is at grist.org/comments/food/2007/02/22/tortillas/:

Indeed, the same company responsible for rigging up the U.S. corn-based ethanol market is also profiting handsomely from soaring tortilla prices. Archer Daniels Midland, the leading U.S. ethanol maker and the world's biggest grain buyer, owns a 27 percent stake in Gruma, Mexico's dominant tortilla maker. ADM also owns a 40 percent share in a joint venture with Gruma to mill and refine wheat -- meaning that when Mexican consumers are forced by high tortilla prices to switch to white bread, Gruma and ADM still win.

In Mexico, the tortilla is more than an iconic food with ancient roots. It's a dietary staple -- as important in its way as rice is to the Asian diet. According to the Mexican business daily El Financiero, Mexicans who eat a traditional diet gain 50 percent of their calories, and 70 percent of their calcium, from tortillas and other corn-based products. Another expert reckons tortillas account for 40 percent of protein in such diets. Corn cultivation originated in Mesoamerica -- comprised of present-day southern Mexico and parts of Central America -- and the region still maintains the crop's most robust store of genetic diversity.

Traditional Mexican fare -- tortillas and beans, supplemented by chile-pepper-based condiments and, when possible, meat -- still largely sustains the nation's vast working-poor population. The median Mexican income is $4 per day, meaning that half of the nation's 107 million people live on that much or less. Fed by similar diets, cultures ranging from the ancient Mayans to the 16th-century Aztecs flourished.

US POVERTY DRAMATICALLY INCREASING

There's something wrong with an economic system that rewards a very few with most of the country's wealth. I don't buy the right-wing argument that rich people are better, more creative, harder working, etc. It's a convenient rationale for a system that is stacked against working people in this country. We now have the highest poverty rates in over 30 years. Poverty and Republican administrations go together. This article by Tony Pugh is linked at www.commondreams.org:

The percentage of poor Americans who are living in severe poverty has reached a 32-year high, millions of working Americans are falling closer to the poverty line and the gulf between the nation's "haves" and "have-nots" continues to widen.

A McClatchy Newspapers analysis of 2005 census figures, the latest available, found that nearly 16 million Americans are living in deep or severe poverty. A family of four with two children and an annual income of less than $9,903 - half the federal poverty line - was considered severely poor in 2005. So were individuals who made less than $5,080 a year.

The McClatchy analysis found that the number of severely poor Americans grew by 26 percent from 2000 to 2005. That's 56 percent faster than the overall poverty population grew in the same period. McClatchy's review also found statistically significant increases in the percentage of the population in severe poverty in 65 of 215 large U.S. counties, and similar increases in 28 states. The review also suggested that the rise in severely poor residents isn't confined to large urban counties but extends to suburban and rural areas.

The plight of the severely poor is a distressing sidebar to an unusual economic expansion. Worker productivity has increased dramatically since the brief recession of 2001, but wages and job growth have lagged behind. At the same time, the share of national income going to corporate profits has dwarfed the amount going to wages and salaries. That helps explain why the median household income of working-age families, adjusted for inflation, has fallen for five straight years.

These and other factors have helped push 43 percent of the nation's 37 million poor people into deep poverty - the highest rate since at least 1975.