Tuesday, July 14, 2009

Parasitic Economy

"..[C]ontract sellers were fully aware of how central their actions were to the economic functioning of Chicago...Speculators worked with, and brought considerable profits to, many of the city's banks and savings and loan associations."

Beryl Satter, Family Properties: Race, Real Estate, and the Exploitation of Black Urban America

"Seven immigrant families living in an apartment building in Chicago's diverse working class Albany Park neighborhood, suspected something was up when their landlord told them to start leaving rent for an acquaintence to collect."

Kari Lydersen,"Fight Foreclosure On All Fronts," Shelterforce, Spring 2009.

Everybody gets screwed from time to time in the U.S., not simply by the ups and downs of the economy but by the malfeasance of market predators. Bernie Madoff, for example. But low-income, people of color get targeted as a matter of sport by the bottom feeders who defend themselves as entrepreneurs just going about their business. And lots of other folks make money on the deals. Nobody wants to interfere too much and consumers, after all, know how to read.

There are certainly differences between the contract buying in Chicago of the 1950s and 1960s and the foreclosure epidemic of today. But there is a common theme of exotic financial products foisted on people. And a common result: devastated families and neighborhoods.

One parastic scheme of the past reported by Satter involved signing people up for buying vending machines after being lured in by advertisements for jobs, selling them on the potential for making money on vending machines, and then getting them to sign wage garnishment agreements in the case they stopped paying on their decrepid, overvalued machines.

What ring of Dante's hell do these market predators come to occupy?

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