Key Concepts
What is predatory lending?
Predatory lending refers to the systematic exploitation of the poor by the "fringe banking industry," which profits from their desperation through practices like payday loans, excessive overdraft fees from traditional banks, and check-cashing outlets.
Name one way poor families pay more for housing or services
One way poor families are forced to pay more for housing or services is that banks often refuse to issue mortgages in low-income areas, forcing residents to remain renters at higher costs.
Why does Desmond argue that welfare is not mainly for the poor
The higher-income families tend to receive benefits that many don't recognize as government help. described as "invisible" benefits.
What is the traditional definition of “success” in America?
The belief that through hard work and self-discipline, anyone can rise above their circumstances, earn money, and achieve success is the idea of “pulling yourself up by your bootstraps.”
Explain how exploitation plays a role in poverty
financially secure benefit from systems that drive down wages for the poor, overcharge them for essentials like housing and credit, and prioritize aid for the wealthy. He argues that poverty is not a lack of resources, but a result of these extractive markets and policy choices that benefit the affluent at the expense of the poor.
Why do landlords often charge higher rents to poor tenants?
Because of limited housing options due to economic or racial constraints, which gives landlords a captive market and allows them to overcharge for worse conditions to maximize profits
Give one example of a welfare program that benefits middle- or upper-class Americans.
The Earned Income Tax Credit (EITC) provides a tax refund to working individuals and families, not just those with no income.
employer-sponsored health insurance
mortgage interest deduction
How do chapters 4 and 5 show that success often depends on invisible support systems?
Welfare programs/services help people succeed. The poor focuses their earnings for basic needs while middle and upper-class families benefit from hidden welfare such as tax breaks, mortgage subsidies, and employer benefits giving them a higher return on investment.
When Desmond mentions “decline in self-sufficiency” how does it relate to reliance on welfare?
By stating that Donald Trump’s council of economic advisors issued a report towards America's largest welfare policies have led to a “decline in self-sufficiency” it relates to the American belief that welfare benefits cause people to become less dependent on themselves/independent.
How do payday loans or check-cashing fees trap people in poverty?
Payday loans and check-cashing fees trap people in poverty by extracting wealth through interest rates and fees, forcing low-income individuals and families into a cycle of debt and dependency on these costly services
How do tax breaks and mortgage subsidies help create “success” for the middle class?
It provides substantial government assistance that builds generational wealth, while welfare programs for the poor are stigmatized (food stamps, Medicaid, etc.), labeling poor people as lazy and not hardworking.
In what ways does Desmond's claim that the poor won't always be able to achieve success differ from Franklin's virtues to achieve success?
- Desmond believes that "poverty is caused by unfair circumstances, not by lack of work ethic".
-Franklin believed that to succeed, one should improve oneself.
How do systems of exploitation (housing, finance, labor) make success harder for the poor?
Systems of exploitation make success harder for the poor by systematically underpaying them in labor, overcharging them in housing, and overcharging them for financial services, effectively trapping them in poverty rather than offering genuine pathways to prosperity.
How does the fact that the poor pay more undermine the American Dream of hard work leading to success?
The practice of forcing the poor to pay more for necessities like higher-interest loans, worse housing, and essential goods creates systemic obstacles that prevent them from escaping poverty through hard work alone, contradicting the American Dream's promise of upward mobility for all.
How does welfare dependency look different when applied to the poor versus the wealthy?
Poor people are viewed as lazy, dependent on the government, and unable to make good financial decisions. Wealthy people are viewed as deserving of benefits, "worked harder", and entitled to government help.
Based on Desmond’s ideas, is success in America truly attainable through hard work alone?
For poor people, working multiple jobs may not lead to stability, since systemic barriers block upward mobility. People of color are often denied access to affordable mortgages and tax breaks that benefit wealthier Americans. Leaving them vulnerable to exploitation by landlords.