
I Worked at Capital One for 5 Years. How We Justified Piling Debt on the Poor - lando2319
https://newrepublic.com/article/155212/worked-capital-one-five-years-justified-piling-debt-poor-customers?__twitter_impression=true
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tlarkworthy
previous discussion:
[https://news.ycombinator.com/item?id=21138418](https://news.ycombinator.com/item?id=21138418)

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Mathnerd314
duplicate:
[https://news.ycombinator.com/item?id=21138418](https://news.ycombinator.com/item?id=21138418)

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malux85
I have a story similar to this.

There was a profound moment in my career when I was working as a consultant
for a company I wont name, but they were in Canary Wharf, which is the
financial center of London, UK.

I was in a glass high-rise building, and had been working there for about 4
weeks. The project I was working on was at heart, selling loans and credit to
people who couldnt afford it - all hidden by opaque language and euphemisms
like the article mentioned. After a few weeks it became clear to me that this
is nothing other than programmers being told to use machines to steal from the
poor, while the managers walked around like they were geniuses when really
they were total frauds and liars.

We were very high up, and I remember going on lunch break and overlooking the
poorer areas of London. With knowledge that the algorithms I was writing were
causing them misery.

At that point I just quit, I told my boss I didn't want to be part of it. He
just looked at me like I was crazy, then when I grilled him to the point of
belittling his intellect, he admitted he knew what they were doing, but had an
insane burn rate (wife, kids, expensive house and shit) so he couldn't just
quit.

If these institutions would die, I would be glad.

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esotericn
> he admitted he knew what they were doing, but had an insane burn rate (wife,
> kids, expensive house and shit) so he couldn't just quit.

A core belief I have, and I try to spread it where possible, is that a person
owes it to themselves and to those around them to live in such a way that they
have personal freedom.

This is precisely the way in which debt is pernicious. This man is trapped in
a debt cycle - just as those below him are.

We really don't need a lot to get by. But people find ways of trapping
themselves - golden handcuffs - it's the house, or the car, or the kids,
whatever.

~~~
api
These entities are very much like hostile AIs, or at least the closest we have
to them in our world. Since solid state AI is not yet good enough, they use
tactics like the ones you describe to assimilate meat brains and use them as
components.

The whole financial industry seems very much like this. There are all these
conspiracy theories that propose that someone -- some group of actual humans
-- is on top, but look closely and it seems that in reality the entities
themselves are on top and the whole system exists to feed itself as an end in
itself.

~~~
alexis_fr
Throughout civilization we’ve sorted all the simple problems. What should we
do when someone murders? Solved. What if it’s because they were bullied?
Solved. How do we identify corruption? Solved. How do we deal with alcohol? We
have a half-working answer. What do we do with dictators? Solved. How do we
compete to create better industries but no so much as not to have thug
mentality, employees burning out at their desk and without depleting Earth’s
resources?

The remaining problems are the hard ones. No surprise they are hard to solve.
Ones that can be solved with our current intelligence already have a known
solution.

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twblalock
It's easy to call this kind of lending predatory, but when you leave the
problem of poverty to private businesses to solve you end up with high-
interest loans and payday loans.

If the government banned this kind of lending and didn't provide an
alternative, poor people would have no lending options. Regulating this kind
of lending (e.g. by tightening the already regulated limits on interest rates)
can only go so far before the products become unprofitable and will be
discontinued.

There is not a market solution for this.

~~~
WalterBright
> poor people would have no lending options

Then they borrow from criminals, which historically provide services the
government bans.

~~~
ngngngng
> which historically provide services the government bans.

Yes... That's why they're called.. criminals?

~~~
WalterBright
The point being the government didn't prevent them from borrowing money, it
just made things worse as they then are forced to deal with criminals.

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motohagiography
It would be interesting to run the numbers on a jubilee for certain kinds of
debt.

I realize monetary policy of inflation is in-effect a debt jubilee, as it was
applied to the boomer generation in the 70s and 80s. Since diminishingly few
people keep their savings in cash (instead of putting into homes, durable
goods, index funds, etc), inflating away debt seems like an inevitable policy
outcome. In the US, if the democrats don't do it next term with MMT, the
republicans will do it with negative interest rates. It's not just a partisan
issue, and it seems like there is no alternative. The main problem is that
without supporting the bottom end with a minimum wage increase to match
inflation, it will just be a middle class debt bailout, and the precariat will
remain as screwed as they always were. Approaching this by funding a minimum
income with a new VAT doesn't improve the their situation since it just
subsidizes exploitation by subsidizing disadvantaged wage levels. The horror
is that it's going to come down to less of what's right, and more of finding
people to screw who are less likely to vote. It's a grisly business.

These Capital One people were just following orders, as the saying goes, but
unsecured debt is a form of slavery. Not sure how long people will accept
incremental quality-of-life improvements in slavery, but at least now we have
entertainment, software, and high speed pizza delivery.

Suddenly, those land parcels in New Zealand are looking more appealing.

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Synaesthesia
Have you wax economist Michael Hudson? One of his central theses is that we
need debt forgiveness, as debt is piling up beyond the capacity for people to
pay it. Debt grows exponentially, and it acts as a hindrance to the economy,
while enriching the banking, finance and real estate sectors.

~~~
Mountain_Skies
Debt forgiveness might be more palatable if it is accompanied by changes to
the system that allowed an unsustainable amount of debt to be generated in the
first place.

~~~
jdsully
A recurring debt forgiveness schedule would do just that. If all debts expired
after 10 years lenders would be _much_ more cautious.

~~~
Mountain_Skies
Don't many debts already have a statute of limitations? IIRC, the statute of
limitations on credit card debt can be as short as three years depending on
the state. I know that's not exactly the same as debt forgiveness but after
seven years, the debt even falls off one's credit report, making it
essentially worthless to the debt owner. Obviously things like student loans
aren't so easily dismissed but there does seem to be a disjointed system of
debt forgiveness already for certain types of debt.

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cemregr
Capital One’s secured card helped me build credit when I arrived in the US
years and years ago. Interest rates were high but I wasn’t shocked by that
given I was someone with no credit history.

~~~
breakbread
I defaulted on my student loans a while back and royally screwed my credit.
When I decided I was going to get my shit together it started with a Capital
One card with a $300 limit and I’m sure a really high interest rate. But my
plan was to, of course, not carry a balance, which I didn’t.

These days my credit score is ~780 and I do some casual churning for travel
points.

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undef238
At least you can buy actual non-discretionary purchases with a credit card.

I've recently become much more alarmed by the rise of these "buy now, pay
later" companies like Affirm and Afterpay, which partner with merchants that
most would categorically put in the discretionary bucket (shoes, makeup,
jewelry, designer clothes) charging similar interest or fees.

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xhkkffbf
I hate to be cynical, but it's a bit rich to keep cashing the checks for five
entire years and then having some come-to-Jesus moment. Did the change of
heart go alongside some new boss who didn't like the work product? Or perhaps
a plan to just move?

It's easy to dis something on the way out the door.

~~~
jstewartmobile
McKinsey Syndrome: delayed-onset morality triggered by life changes and/or
career obstacles

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Simulacra
Debt is just another business. So long as the poor keep paying on the debt, it
makes business sense to keep pushing debt to them. It seems the idea is to
squeeze the rock just to the point it bleeds, but not kill it.

~~~
danmg
Just like how a parasite won't kill its host.

