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Broke, USA

By Gary Rivlin

Harper Business; 358 pages

There was a time when Gary Rivlin didn't know what to make of payday loans. Sure, the short-term, super-high-interest-rate loans may seem usurious, but where else can a single mom making $22,000 a year turn when her car breaks down and her next paycheck is a week away? Yet after some digging, the former newspaper reporter started regarding payday lenders--as well as check cashers, pawnshops and tax-refund-advance outfits--as Poverty Inc., an industry devoted to squeezing ever more money out of the people who can least afford it. These businesses, Rivlin concluded, don't respond to demand nearly as much as they create it, pushing people into a dangerous cycle of debt. In Broke, USA, Rivlin faults more than just the Check 'n Gos of the world. The best customer for a credit-card company (even a behemoth like Citibank), he writes, is one recently out of bankruptcy, a financially vulnerable person who nonetheless has a "taste for credit." While the subprime-mortgage debacle plays a prominent role here, Rivlin argues that the conversation America needs to have is about much more than houses.

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