"Get your facts first, and then you can distort them as much as you please." (Mark Twain)

Wednesday, July 19, 2006

It's No Crime Being Poor (But You Still Have To Pay Your Fine) 

I have written before about my good friend who I'll call Todd (because his name is Todd). He's emblematic in my mind of a certain breed of centrist, non-partisan American voters - he voted twice for Clinton and remains a big fan, but also voted at least once (in 2004; I'm not sure about 2000) for Bush. He's environmentally aware and socially liberal and has no use for the Christian right, but his single biggest issue is security - he makes no bones about his 2004 vote being the direct result of 9/11 - and tends strongly toward economic conservatism. He's very much in favor of Social Security privatization, and supported the Bush tax cuts - which he believes (rightly or wrongly) were personally beneficial to him. He is, in short, no class warrior.

Just last week, Todd and I were enjoying a beautiful Seattle summer night on his boat (as I said - no class warrior, he), when out of nowhere he started to complain about the shameful way that certain financial "service" providers - banks, credit card companies, etc. - treat people who find themselves in financial difficulty. He was not talking here about illegal predatory lending, but rather about the fees, interest rate increases, subprime lending practices, and so forth which make full participation in the economy prohibitively expensive for the poor - or even the middle class who happen to hit a rough patch.

I thought about Todd today as I read this nugget from the New York Times via (Raw Story, for non-registration goodness):
Drivers from low-income neighborhoods of New York, Hartford and Baltimore, insuring identical cars and with the same driving records as those from middle-class neighborhoods, paid $400 more on average for a year’s insurance, the (registration-restricted) New York Times reports Wednesday. Excerpts:
The poor are also the main customers for appliances and furniture at “rent to own” stores, where payments are stretched out at very high interest rates; in Wisconsin, a $200 television can end up costing $700.

Those were just two examples among several cited in a report Tuesday showing that poor urban residents frequently pay hundreds if not thousands of dollars a year in extra costs for everyday necessities. The study said some of the disparities were due to real differences in the cost of doing business in poor areas, some to predatory financial practices and some to consumer ignorance.

The study, from the Brookings Institution, said finding ways to eliminate these added costs, often called a “ghetto tax,” could be an important new front in the fight against poverty.

For the most part, Americans - whatever their political leanings - value fairness. To the extent that any such "ghetto tax" reflects actual differences in the cost of doing business, most people would probably be fine with it. But when it comes to simply putting someone's balls in a vice just because you can, people will rally to support the underdog.

It goes without saying that few Republicans are likely to highlight this issue. Unfortunately, certain Democrats (Joe Biden comes immediately to mind) are just as myopic. But - if a candidate can frame this issue in a coherent manner and offer solutions that are not easily dismissed as "class warfare," he or she is likely to gain significant support. At this point, it seems that John Edwards (among national candidates) is uniquely positioned to exploit this issue, but there is no reason why he should own it exclusively, nor is there any reason why statewide candidates can't use it as well (consider that the insurance industry and retail mortgage brokers are usually state licensed). It would be nice to see some creative thinking in this regard from the Democrats, in 2006 and beyond.




Hi there Blogger, a real useful blog.Keep with the good work.
If you have a moment, please visit my wisconsin small business loan site.
I send you warm regards and wishes of continued success.
A fantastic blog yours. Keep it up.
If you have a moment, please visit my south florida bail bonds site.
I send you warm regards and wish you continued success.
Hey Fellow, you have a top-notch blog here!
If you have a moment, please have a look at my small business credit and financing site.
Good luck!
Post a Comment