Gentrification Indicators

Traveling in Denver recently, I passed by my old neighborhood.  Besides obvious indicators like the recent arrival of the Tattered Cover to my old stomping grounds, gentrification is in full effect.  A proliferation of luxury condos and trendy restaurants are creeping slowly West on Colfax from Colorado.  I saw one change that really made the evolution more interesting:  a Rent-to-Own furniture store had gone out of business and had been reoccupied by a Starbucks (The symbol, for better or worse, of an area who’s residents have cash to toss at a $4 glasses of sugar-milk).  It wouldn’t have meant anything to me more than a small nod to the march of American progress (such as it is) but Jon Taplin pointed out this excellent article on the growing polarization between two classes in this country - The Investor class and the Lottery class.  From the article,

The institutions that encourage thrift have moved uptown, catering to upper-income Americans with an ever-expanding array of tax-advantaged opportunities to invest and build wealth. The potential “small saver” has been left behind as prey to new, highly profitable financial institutions: subprime credit card issuers and mortgage brokers, rent-to-own merchants, payday lenders, auto title lenders, tax refund lenders, private student-loan companies, franchise tax preparers, check cashing outlets and the state lottery. Once existing on society’s margins, these institutions now constitute a large and aggressively expanding anti-thrift sector that is dragging hundreds of thousands of American consumers into profligacy and over-indebtedness.

Not having given the issue as much thought as some, I’ve always wondered what exactly it was that was so distasteful about credit cards, rent-to-own shops, payday loan stores and their ilk.  As Jon points out in his article,

These companies in the sub-prime credit market collected $17.1 billion in late fees last year.

Far from encouraging responsible behavior, these companies have built their businesses enabling people to make choices that will damage their financial future.  This is not an amazing aha! moment for me per se.   I’ve chosen to live without credit cards for the better part of a decade specifically to deny my own ability to make those poor decisions (agreed, I should be able to manage the problem through logic instead of such a drastic measure but…..). The generally icky feeling I get from these businesses is due their choice, their conscious choice, to profit from the likelihood that people will continue to make bad choices.  That is a business decision, a socially destructive and reprehensible business decision.  The people who are making the bad decisions are not blameless in this situation but they are literally being preyed upon by these institutions who make no effort to educate and correct the bad decisions that they see being made every day.

Barbaras article offers some solutions including increased public education, creation of new thrift-promoting organizations and a re-purposing of state-run lotteries (which I’ll get into in a second).  I would encourage you to read and think about these solutions and to vote with your dollars - join a credit union to support your local borrowing community, don’t work for, rent, or sell your property to organizations who’s values run counter to the general welfare of humanity and don’t support organizations verbally or monetarily who engage in this type of predation.

Having benefited directly from Colorado State Lottery funds that went to create potions of my town’s beautiful river park, I appreciate what that the state makes funds available for good, community-centric projects like this one.  The difficulty remains that, when the statistics show that the source of these funds is collected from people who can least afford to part with it, it should be clear that our State has no business encouraging this kind of behavior.

Besides, a portion of the whitewater park in BV was funded entirely by concerned citizens and built with local labor.  It’s good to remember that there are always other solutions.

Photo Credit