By PAUL BUCHHEIT
The profit motive fogs the thinking of free-market advocates. The Economist gushes, “Take a bow, capitalism…the biggest poverty-reduction measure of all is liberalising markets to let poor people get richer.” Forbes proclaims its belief in “the unmatched power of capitalism to improve human life.”
Self-indulgent capitalists have turned much of America against its own best interests by promoting a winner-take-all philosophy that reaps great rewards for a few people at the expense of everyone else. To the neoliberal, vital human needs like health and education are products to be bought and sold.
Here are some other examples of greed and the pain it causes.
Water
The city of Detroit, which is positioned next to the greatest supply of fresh water between the polar ice caps, has lost its access to water because of bad financial deals that have left unsuspecting citizens with over a half-billion dollars in interest payments. Emergency Manager Kevyn Orr responded by putting the whole water system up for sale.
The United Nations has reminded us of the obvious, that water is a human right. But the prominent water company Nestle says water is not a human right. The company has taken this essential ingredient of human life and sold it back to us at a million percent profit.
Meanwhile, as average citizens of America and the world face increasing hardships from climate change, Wall Street firms are, according to Bloomberg, “investing in businesses that will profit as the planet gets hotter.”
Housing
Blackstone is a corporate model for making money at the expense of desperate former homeowners. Since the recession, it has become the nation’s leading landlord, buying up tens of thousands of homes at rock-bottom prices, and then renting them back, often to the very people who lost them.
It’s a perfect business, a well-designed process of predatory equity.
1. Buy Foreclosures.
2. Rent Them at Exorbitant Prices. Only one-third of Blackstone’s Los Angeles renters are paying affordable rent, according to Department of Housing and Urban Development standards.
3. Skimp on Maintenance. According to a Homes for All study, 46 percent of residents reported plumbing problems, 39 percent reported roaches or insects, and 90 percent of Los Angeles renters have never met their landlords.
4. Package the Properties into “Rental-Backed Securities.” These sound disturbingly like the mortgage-backed securities that crashed our economy a few years ago. Companies like Blackstone and Goldman Sachs are doing it to America all over again.
Savings
The financial industry indiscriminately targets all struggling Americans, from the impoverished class to the low-income class to the middle class. At the lowest level loom the payday lenders, with about as many locations in the U.S. as all the McDonaldsand Starbucks combined, and with annualized interest rates that can reach 1,000 percent or more.
For families with incomes in the $25,000 range, about 10 percent of their income goes for fees and interest to financial institutions. The average underserved household spends $2,412 each year on alternative banking services.
For middle-class Americans trying to save for retirement in a 401(k), bank fees take about $2 of every $5 over a lifetime of investing.
Justice Itself
With the highest incarceration rate in the world, and with imprisonment skewed toward minorities, our business-oriented society has effectively turned our poorest citizens into products, with an emphasis on product volume.
Private prisons make deals with local governments to ensure full jail cells.
Company owners have taken advantage of the legalized slavery clause of the 13th Amendment, paying as little as 93 cents an hour for their labor.
Still other companies step in during probation periods, charging fees that keep poor people at the mercy of the ‘justice’ system.
And in the county that contains Ferguson, Missouri, as noted by author Radley Balko, some of the towns “can derive 40 percent or more of their annual revenue from the petty fines and fees collected by their municipal courts.” Fines and fees for traffic offenses, fare-hopping, loud music, uncut grass, trespassing, wearing saggy pants, or failing to subscribe to the town’s garbage service.
Poverty Capitalism: The Free Market At Work
A staunch capitalist might point out that America’s growing poverty has created markets for anyone able to capitalize on destitution. Each of us, after all, is a source of profit, as long as we rent or own, save a little money, and drink water.
