Black Man Insulted And Detained For Trying To Cash His Paycheck

Something that is ongoing in American culture is that people from just about every walk of life think and behave as if Black people, specifically Black men, are less intelligent lower forms of life that deserve absolutely no respect and are almost certainly guilty of something.

I don't think it's possible to find a honest Black man who hasn't run across this attitude in one form or another. 
This never ending hate and contempt is something that almost certainly leads to greater hypertension, stress, and all of the health concerns that go along with that. This racism could be something like a judge mistaking a Black lawyer for a criminal defendant, Bill O'Reilly "joking" that the professor Marc Lamont Hill looks like a cocaine dealer, or co-workers constantly mistaking one Black man for the only other Black man in the department when the two look nothing alike and are far apart in age. 

It is what it is. This started long before I got here and will continue after I'm gone. But one really egregious example of this recently came to light in Minnesota.

Joe Morrow, a Minnesota man, was the victim of what many call “banking while Black” after being put in handcuffs after attempting to cash his paycheck inside a U.S. Bank branch in suburban Minneapolis last October.
Morrow told KSTP-TV reporters that despite having an account with the bank, employees at a branch in Columbia Heights, Minnesota, “were all looking at me and just staring at me and then looking at the check and then staring at me again. And I’m already knowing what they’re thinking — that the check fake.” 

Morrow, who moved to Minnesota from Mississippi last year and worked as an “order picker,” said the incident began well before the police had arrived at the bank where he attempted to cash a check for roughly $900. 

The man said he was informed by the bank’s manager, John Askwith, that the check was fraudulent and that “you people always coming in here with fake checks.” I work there, bro. And I’m going to report you too, bro, this is racial,” Morrow was heard saying calmly, without expletives, to the manager before he was cautioned about his allegations of racial profiling. When Sgt. Justin Pletcher arrived, police body camera footage showed Morrow already in Askwith’s office, leaning back in a chair, hands folded. The 23-year-old maintained that the check was indeed real.

Modern Day Loansharking and Obama Treasury Secretary Timothy Geithner

Mister Banker Mister please, how much does money mean
Won't you reconsider Mister Won't you do this thing for me
Mr. Banker 
-Lynyrd Skynyrd
I've written before that if you were a criminally minded sort in today's environment you'd be a fool to join the Mafia or other illicit organizations. These days, the benefit is no longer worth the cost. Working outside the law you have to worry about informants, violent paranoid co-workers, electronic surveillance up the wazoo, and long prison terms. That's no good. If you have wicked urges be smart and work inside the law. For example, if you want to assault or kill people, become a cop. You will be virtually untouchable.

If you want to help people gamble away their cash so that you can make a profit, open a liquor store and run the state sponsored lottery. People will give you money for nothing and thank you for the opportunity. And if you want to loan money at extortionate rates, changing or reinterpreting contract terms to your benefit while emptying your client's sucker's pockets, then do what former Obama Treasury Secretary Tim Geithner did and open up/run a finance company that markets predatory loans to impoverished and/or desperate people.

The check arrived out of the blue, issued in his name for $1,200, a mailing from a consumer finance company. Stephen Huggins eyed it carefully. A loan, it said. Smaller type said the interest rate would be 33 percent.

Way too high, Huggins thought. He put it aside.

A week later, though, his 2005 Chevy pickup was in the shop, and he didn’t have enough to pay for the repairs. He needed the truck to get to work, to get the kids to school. So Huggins, a 56-year-old heavy equipment operator in Nashville, fished the check out that day in April 2017 and cashed it.

Michigan: Detroit Bankruptcy, Pensions, and Abortion Insurance Coverage

There's a lot happening in Michigan. Recently a federal bankruptcy judge ruled that yes indeed Detroit was bankrupt.This shouldn't have surprised anyone. However the judge didn't stop there. Among other things he found that Detroit municipal pensions were not entitled to special protection despite what the Michigan constitution states. In the judge's view the pensions were contracts just like any other. The judge also implicitly agreed that the state and city did not negotiate in good faith but basically shrugged his shoulders and said that there was no alternative. If you're not familiar with the writer David Cay Johnston, well you ought to be. He has a knack for explaining what's going on in the worlds of finance and economics in an easily understandable manner. You should read this article.

The result will mean even worse poverty in the sputtering Motown, where a once robust industrial tax base has withered away, the starkest example of the economic devastation wrought by government policies that for decades have encouraged companies to move manufacturing offshore.

Financial mismanagement in Detroit under every mayor in the past six decades also contributed to the disaster, except for the honorable exception of Coleman Young in the mid-1970s. The result: Public worker pensions averaging $19,000 a year will be cut to the bone. That is sure to increase demands for federally funded food stamps, a program which Congress has just cut, and other welfare to make up for some of pensions workers earned but will not collect.

Norman Stein, a Drexel University law professor who is an expert on pensions, said that if the Detroit order stands it will become standard practice to slash benefits. “It would be a human catastrophe of the first order if pensions of vulnerable older workers can be cut whenever a local government goes to bankruptcy court,” Stein said. “We will be consigning firemen and policemen, who did nothing wrong other than protecting the city and depending on the city's promise, into old-age poverty.”

I thought that Johnston's article distilled everything down to its essence. I seem to remember international banks causing the near destruction of the modern semi-capitalist world as we knew it back in 2008-2009. Although the spokesmen and servitors of these financial institutions are extremely fond of quoting neo-liberal free-market bromides to other people, especially those who lack capital, when it was their own behind in a sling they ran to the US government for a bailout. That same US government also bailed out most of the US auto industry. These actions were obviously massive violations of free-market principles and the sorts of things the US screams about when China or other nation states engage in them.

However, generally speaking most people won't permit their ideology to interfere with their survival if it comes down to it. A Muslim shipwreck survivor with nothing to drink but wine and nothing to eat besides pork sausages will likely choose survival over religious dictates. A feminist egalitarian trapped in a burning house will not complain when a strong fireman saves her by lifting debris from her which she was unable to lift. And a bigot experiencing a heart attack probably won't make too much of a fuss when the doctor performing the angioplasty is of a different race than he is. There are exceptions but most people would agree that such folk are well, stupid.

And yet some people seem to think that a society which committed trillions to a bank bailout which did little to help working people and fretted over the rights of speculative bondholders in an auto bailout should stand and do nothing as the rights of retired pensioners are thrown into the trashbin. It's a mean old world indeed. No one wins in bankruptcy other than the lawyers and business entities who suck up public dollars and goods. That said though I do think that state and federal law should recognize a difference between money being paid to a retired fireman who does not receive Social Security and money being paid to an institutional investor who made a bet. Unfortunately Emergency Manager Kevyn Orr seems to want to ensure that the banks get paid first.

Moving along.
You may remember a recent post in which we discussed whether corporations have religious rights and whether the federal government can make corporations pay for birth control abortifacients which violate the owner's conscience. I wrote then that supporters of such rules tend to overlook the fact that just because you have a right to do something does not imply that you have a right to make someone else pay for it. Something that was on my mind then which I didn't mention was this next story. The Michigan State Board of Canvassers confirmed a petition drive which will make anyone who wants abortion insurance coverage purchase a separate rider. This initiative can be made into law by the legislature within 40 days and can't be vetoed by the governor. That is how we do things in Michigan. Direct democracy still has a place in our process. No one challenged the signatures. They were certified. I sometimes think that pro-choice people can get outworked on the ground game.

Lawmakers took preliminary procedural action on a voter-petitioned proposal to ban group health coverage for abortions as its supporters and opponents sparred in press conferences Tuesday at the state Capitol.

The exchange occurred a day after the Board of State Canvassers confirmed a Right to Life-backed drive had secured enough petition signatures to put the initiative before lawmakers.

On Tuesday, the Senate sent the petitions to its Government Operations committee as an initial step in the legislative process. The House took the default step of putting it on the floor calendar for a second bill reading.

Senate Majority Leader Randy Richardville said he has discussed the proposal with the Senate’s GOP majority but doesn’t know whether the group is ready to vote yet. Richardville, R-Monroe, would say only he expects action “within the next 40 days.”
Lawmakers have 40 legislative session days from Monday to enact this type of voter-initiated legislation. Inaction would send it to the statewide ballot in the November 2014 election.                                                                                       

LINK

Admittedly this will be the state interfering with private contracts to enforce its idea of the good. Unfortunately for those opposed to this particular instance I think it's difficult to honestly have too much outrage as the state does this in various other ways all the time. PPACA supporters explicitly cheered the state's power to do this in other cases. We must be careful giving the state powers like this because people with differing ideas about what's good than us eventually obtain power. An argument in support of the PPACA was that insurance costs would drop for everyone if we forced those dastardly "free riders" to pay their fair share. Well that argument swings the other way too. Those who want an abortion should not make everyone else share the cost. I am pro-life so I'm not too bothered by this. Because I'm leery of the state sticking its nose into employment contracts willy-nilly I'd be willing to oppose this action provided that there was some realization on the other side that making people pay for certain things which violate their conscience is often a bad idea. But there is rarely that concession. Lacking compromise things devolve to power politics. 

So it goes. As abortion is uncommon, if this initiative should become law I don't expect a lot of cost changes to policies. This is about principle. There are already 23 other states which have similar rules around abortion and insurance. It's not as if Michigan is breaking any new ground here. Both the Michigan Senate and House are Republican dominated. There are also some pro-life Democrats. Nevertheless this is not a slam dunk. Michigan Governor Rick Snyder is not a social issues hard right governor. Although under our constitution he can't veto this measure he may attempt to twist arms to convince legislators to let the people vote on it. We shall see in 40 days.

What's your take on these two issues?

Banks and Loan Sharks: Payday Loans and Online Lending

When you think of a "loan shark" you might stereotypically think of a hard nosed man who will advance you some cash when you're in a bind but is rumored to hurt or even murder people who don't pay him back on time. He might be affiliated with the regional office of a national organization of similar businessmen. He probably employs people the size of small refrigerators who collect for him. He may tool around town in a late model Cadillac or older Town Car with an expansive albeit suspiciously stained trunk. If you are late on your payments or if he suspects you might be thinking about being late on your payments, he might suddenly appear at your home and politely ask for his money. Or he may follow you to your anniversary celebration and throw you a beating in front of your spouse and kids. It all depends on his mood and how late you are. 

Hey, all he wants is his money. Since he can't rely on the courts to enforce a technically valid but completely illegal contract, you can understand why he would need to have some, well, unorthodox methods of securing his capital. Since many of his clients are themselves violent lowlifes, criminals and other trash, stern dunning letters and threats to report late payers to credit bureaus won't have the desired effect. Generally speaking baseball bats and tire irons are more effective than plaintive phone calls at getting people's undivided attention.

But if you're a loan shark all this can be hectic and dangerous. Your clientele is often armed themselves. If you kill a debtor you lose that payment stream. Harassing or beating up debtors, while occasionally satisfying, can bring in the police or worse, scare the deadbeat so much that he scurries down to the local FBI office. And then you'd probably be convicted of several racketeering, conspiracy, usury and assault charges and spend the next 40 years in a federal penitentiary. No good. So what's an ambitious hoodlum to do?

Well if he was smart he'd realize that the risks of dealing with criminals and degenerate gamblers, ordering or carrying out beatings and murders, sharing profits with bosses who are even more paranoid and brutal than he is, and spending time worrying that a customer or associate might be an undercover FBI agent or informant don't really justify his shylock profits. I mean you can't spend your money if you're dead or in jail right? And really, who needs all the stress? What if you could make similar profits in a related venture that not only was completely legal (more or less) but also put banks and lawyers on your side for a change? I mean how cool would that be? Wouldn't a loan shark like to have a regular nine to five gig with above board profits, vacation and sick days, 401K opportunities and incentive bonuses without all the messy illegality and violence that used to go along with his business? Classic loan sharks aren't as common as they used to be. They got smart.

A loan shark should enter the payday loan/online lending business. Now, in payday loan lending you might not attain the 1040% annualized nominal interest rate on a typical 6-for-5 mob loan but then again you don't have to pay hoodlums who will beat up, intimidate or kill delinquent clients either. You can start your car without wondering if a co-worker put a bomb under the seat. You can attend last minute meetings with the franchise president without being frightened because the conference room is empty. Your overhead shrinks. You can pay taxes and bank your profits. And banks will help you with your business instead of informing the IRS. And if you like, you can even keep your two-tone pinstripe suits for old time's sake. What a country, eh??

Major banks have quickly become behind-the-scenes allies of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent. With 15 states banning payday loans, a growing number of the lenders have set up online operations in more hospitable states or far-flung locales like Belize, Malta and the West Indies to more easily evade statewide caps on interest rates.

While the banks, which include giants like JP Morgan Chase, Bank of America and Wells Fargo, do not make the loans, they are a critical link for the lenders, enabling the lenders to withdraw payments automatically from borrowers’ bank accounts, even in states where the loans are banned entirely. In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals. “Without the assistance of the banks in processing and sending electronic funds, these lenders simply couldn’t operate,” said Josh Zinner, co-director of the Neighborhood Economic Development Advocacy Project, which works with community groups in New York.

For the banks, it can be a lucrative partnership. At first blush, processing automatic withdrawals hardly seems like a source of profit. But many customers are already on shaky financial footing. The withdrawals often set off a cascade of fees from problems like overdrafts. Roughly 27 percent of payday loan borrowers say that the loans caused them to overdraw their accounts, according to a report released this month by the Pew Charitable Trusts. That fee income is coveted, given that financial regulations limiting fees on debit and credit cards have cost banks billions of dollars.

Ivy Brodsky, 37, thought she had figured out a way to stop six payday lenders from taking money from her account when she visited her Chase branch in Brighton Beach in Brooklyn in March to close it. But Chase kept the account open and between April and May, the six Internet lenders tried to withdraw money from Ms. Brodsky’s account 55 times, according to bank records reviewed by The New York Times. Chase charged her $1,523 in fees — a combination of 44 insufficient fund fees, extended overdraft fees and service fees.

For Subrina Baptiste, 33, an educational assistant in Brooklyn, the overdraft fees levied by Chase cannibalized her child support income. She said she applied for a $400 loan from Loanshoponline.com and a $700 loan from Advancemetoday.com in 2011. The loans, with annual interest rates of 730 percent and 584 percent respectively, skirt New York law. Ms. Baptiste said she asked Chase to revoke the automatic withdrawals in October 2011, but was told that she had to ask the lenders instead. In one month, her bank records show, the lenders tried to take money from her account at least six times. Chase charged her $812 in fees and deducted over $600 from her child-support payments to cover them.“I don’t understand why my own bank just wouldn’t listen to me,” Ms. Baptiste said, adding that Chase ultimately closed her account last January, three months after she asked.

LINK

Now stupid people will often do stupid things. Now why does this even matter you might ask? Well it matters because instead of helping people start businesses and get out of poverty payday/online lenders are largely in the business of helping poor people to stay poor. And wouldn't you know it, black people, who already have lower incomes and wealth than most Americans, are disproportionate customers of payday/online lenders. Black people are about 12% of the US population but make up 23% of payday borrowers. Renters and people of lower income are also more likely to use payday loans than homeowners and higher income Americans. Most people are using payday loans for daily expenses. This means it is more difficult for people who are already behind the 8 ball economically to get over the hump. They are diverting a sizable portion of their already meager resources to interest payments for things that if they really thought about it, they may not have needed. 

Or viewed another way if they really did need them then this is another good reason we need to raise the minimum wage here and work to increase income in this country for our citizens as opposed to helping people in China, India or elsewhere. If people are taking loans just to make ends meet then something has gone drastically wrong with our job generating machine.  I view payday/online lending not just as a symptom of poor personal financial management or temporary desperation but as a wholly predictable outcome of a deunionized workforce with stagnant income growth. JP Morgan Chase, not content with aiding legal loan sharks to rip off low income citizens, also allegedly ripped off other banks by selling them crap mortgages. HSBC escaped criminal charges after willingly assisting drug cartels in laundering their profits. Apparently something has gone drastically wrong with the financial superstructure in this country and world. We need to fix this ASAP because otherwise not only will we continue to have record levels of income inequality as well as financial corruption but growth will also stay anemic. You can't grow when you're spending so much of your income servicing debt.

What we ought to be worried about is not the mob shark but all of the other debttrappers that have proliferated since our credit markets were deregulated. There are more of them now than ever before and most of them have been issued licenses. That is the loan-shark problem regulators should confront.

It looks like financial market deregulation hasn't so much gotten rid of the classic loan shark as it's made him clean up and operate above board, with almost the same business model. It looks like Lucky Luciano was right on the money with his insight.

‘I’d do it legal. I learned too late that you need just as good a brain to make a crooked million, as an honest million. These days, you apply for a license to steal from the public. If I had my time again, I’d make sure I got that license first!’
Charles "Lucky" Luciano

QUESTIONS

1) Should Payday loan/online lending be outlawed completely?

2) Does the government have a role to protect people from themselves? 

3) Is there any difference between a bank and an unregulated lender?

4) Do you know anyone who has used payday loans? Have you used them?