The American Way of Debt
As one may observe from its cover ? ?The Book the Debt Industry Doesn?t Want You to Read? ? Maxed Out is an exposé of the modern-day debt industry. And what an exposé it is! By the end, used car salesmen couldn?t look more déclassé than do the sharks in suits who, like the drug-pushers the author likens them to, are out to get us hooked and keep us hooked until home, hearth and happiness are destroyed.
Its genius is that it is not just a parade of shocking facts, accompanied by vague claims that something really should be done about them. Instead, it addresses the most interesting question: how did this situation come to be?
According to Scurlock, it can be attributed to two men: Dee Hock and Walter Wriston. No, I hadn?t heard of them either, but if Scurlock is to be believed, they created the conditions that allowed the world?s credit-binge to occur. Dee Hock, Scurlock informs us, ?didn?t invent the credit card. He did something far more important: He believed in it. Really believed. Believed that it had the potential to free human beings from rules and regulations . . .? Back in 1968, when he was pottering around a bank, he was given a job that no one wanted. BankAmericard, which would eventually become Visa, was losing banks money, and Bank of America executives had decided to invite the angry licensees to a convention. In the midst of the chaos, Hock ?took to the stage?, and ?promised to clean up shop?. Then, in an effort to destroy the banks he so hated, and liberate humanity through the proliferation of a brand of international credit, he accidentally made those banks more powerful than they had ever been.
All that was needed to finish off the job was Walter Wriston, who became CEO of Citibank in 1970. Scurlock informs us that, throwing post-Depression banking caution to the winds, Wriston decided to go after the only market that could provide the 15% annual profits he had promised his shareholders: the American middle class. The problem was that banking regulations stood in the way. The solution was ingeniously simple: ?Get rid of the laws?. Laws designed to safeguard the public and prevent another Depression were systematically destroyed ? all, of course, in the name of freedom.
Which is how, Scurlock contends, the world has arrived at the credit nightmare it is currently in, and how the harrowing stories he relates have been made possible. Because, as could have been anticipated, debt did not just become something for freedom-loving individuals to choose: it became something for them to have foisted on them by a deregulated financial industry. Thankfully, Maxed Out is written in a masterfully detached tone, otherwise its catalogue of predatory practices and ruined lives would be unreadable. Instead, it?s a timely and riveting read (even though it was written before the financial crash), and does much to explain why credit has been so freely given to those who seem least able to repay it. It?s also the most devastating, entertaining work of investigative journalism I?ve read since The American Way of Death.
