Indebted - Debt and Race in America

Welcome to the Season One finale of Indebted! Our episodes have focused on exposing how debt harms Black people and the entire economy—but people are fighting back. There are reasons to hope for a better, debt-free future. In this episode Maurice is joined by four heavy hitters in the fight against debt and its roots in systemic racism. They discuss the many approaches to tackling these problems, from education and legislation to policy advocacy and direct action.

Guests this episode include:

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While municipalities in America don't leverage debt in quite the same way an individual or family does (i.e. they can't put it all on a credit card or step into a payday lending office), they still find themselves needing to spend on long-term projects they can't afford through standard taxation. Enter municipal bonds, a type of loan that in ideal circumstances provides stable interest rates and payment schedules for the city and a secure investment for a diverse group of institutional lenders like banks and pension funds. A simplified explanation can make it sound like an easy win-win for all sides. But this isn't always the case.

In this episode, Maurice explains the struggles Puerto Rico, Chicago, and Detroit have in common when it comes to municipal bonds and urban racial inequity. Joining him to further elaborate and help listeners better understand a purposefully complicated system is Saqib Bhatti. Along with Maurice, Saqib co-founded the Action Center on Race and the Economy (ACRE) and currently acts as co-executive director.

ACRE's research reports cited in this episode can be found on their website here.

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The "world's richest man," Elon Musk, purchased Twitter (since renamed X) for $44 billion in 2022. It's estimated he holds $13 billion of that amount as debt from bank and other loans, a sum the average working class person would obviously face severe repercussions for. He didn't have the liquid cash for the purchase and the company only generated $4 billion in revenue in 2022, but he was given loans to make the purchase anyway. The site's always been a long way from seeing a profit, and is in a worse position since Musk's takeover. There's no sign of it earning the revenue necessary to pay off the debts he has incurred. So what's the deal? Why is there a separate set of rules for the rich when it comes to debt? And how do we fight to make these rules more equitable and hold wealthy mega-debtors accountable?

In this episode, Maurice talks with Charles Khan, an organizer with Hedge Clippers, a national campaign focused on unmasking the dark money schemes and strategies the billionaire elite uses to expand their wealth, consolidate power and obscure accountability for their misdeeds. Maurice and Charles explore the commonality of such deals for the wealthy by looking at the history of leveraged buyouts (LBOs), and discuss how we can organize to push back against this separate set of rules for the elite.

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When someone finishes a prison sentence, we often say they've "paid their debt to society." But financial debt doesn't stop chasing us if we find ourselves interacting with the criminal justice system. People charged with crimes who can't make bail can find themselves in jail awaiting trial for weeks and months, unable to work. Or they may need to take out costly bail bonds so they can get out of jail and continue to support themselves and their families. And it's no secret that Black and other people of color are much more likely to have encounters with law enforcement that result in arrests, fines, and fees. A bad interaction with the police on someone's worst day can spiral into years of debt.

The complications listed only scratch the surface of what can be understood as carceral debt. Joining Maurice this episode to discuss the many debt traps and spirals embedded in the American carceral system is Dr. Richelle Brooks, the carceral debt organizer with the Debt Collective.

Citations and resources mentioned this episode:

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No one gleefully spends on medical expenses. These unplanned costs land on people in vulnerable moments. Adding to the stress, many if not most in the US are un- or under-insured. The result? A whopping 85% of people with credit reports hold healthcare debt. Medical costs are so high and unpredictable that people often find themselves seeking emergency care at the latest possible moment in hopes of not incurring such debts. Their care and recovery suffer.

In this episode, Maurice is joined by Dr. Luke Messac, MD/PhD, a physician in emergency medicine and a medical historian and author. Together they discuss how medical debt shows up among Black patients he sees and in his historical research. They'll also preview his upcoming book, Your Money or Your Life: Debt Collection in American Medicine, available early November 2023 from Oxford University Press.

Also joining this episode to discuss her personal experience with medical debt is Angela Peoples, an activist and director of Black Womxn For as well as co-founder of The South.

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You are being graded and given a score based on a multitude of financial details in your life, whether you like it or not. Rent and billing history, loans, credit card purchases... every financial move you make. Of course we're talking about what's known as your FICO Credit Score. And all the data you never agreed to have surveilled? It was hacked and stolen back in 2017 due to a data breach of one of the big three credit bureaus, Equifax.

In this episode Maurice lays out the history of credit surveillance, from individual banks handing out loans based on "vibes" more than anything, to trusting the insecure data systems that led to the 2017 Equifax breach. And all along the way, it's America's Black population that disproportionately suffers the consequences of these experimental models in credit surveillance and lending.

Joining this episode to discuss why our models of credit scoring for lending have impacted Black and other marginalized populations is Tamara K. Nopper, senior researcher with the Labor Futures initiative at Data & Society and an assistant professor of sociology at Rhode Island College.

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The cost of higher education and the debt we take on for the chance at a better life is one of the most ubiquitously felt financial burdens of American life. But any way you slice it, Black and brown borrowers come out worse off than their white counterparts, often carrying significantly more debt for longer periods and getting less return on their educational investment.

With the net cost of this debt ballooning to more than one trillion dollars in the US, the Biden administration attempted to provide a blanket $10,000 in relief to all borrowers. The US Supreme Court ruled against that modest measure in June 2023. Anxious borrowers continue to wonder when and if relief will ever come.

Maurice explores student debt with two guests in this episode. Recent Howard University graduate Shyann McDonald helps us understand how the real costs of student loans are blurred, and how they affect students today. Then he talks with Deputy Executive Director and Managing Counsel for the Student Borrowers Protection Center, Persis Yu to understand the wider implications of debt, its long-term impact on borrowers, and how we might find our way out.

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Our cities are covered with storefronts and ads for payday loans. These are businesses promising a short-term cash advance loan to cover an emergency leading up to your payday. More often than not these types of loans lead to a downward spiral of debt for their disproportionately Black and Latinx customer base, thanks to the exorbitant interest rates they're allowed to charge vulnerable people with minimal access to standard banking models. In this episode, Maurice is joined by Policy Director for the Community Economic Development Association of Michigan (CEDAM) Jessica AcMoody. Both an expert in this type of debt and an activist, Jessica explains the payday lending trap and recent efforts made in Michigan to mitigate its harmful effects.

But some see payday lending as the best short-term solution we presently have for under-banked communities to get access to funds when needed. To discuss this, Maurice is also joined by the William Simon Professor of Economics and Public Policy, Director of Economics at Hillsdale University Gary Wolfram. In 2019, he authored an op-ed for Bridge Magazine titled "I'm an Economist and I Support Payday Loans." Professor Wolfram explains his reasoning and explores alternatives with Maurice in this interview.

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Convergence is pleased to announce the launch of our new podcast Indebted. In this opening episode, a most unexpected first piece of mail addressed to his newborn son is the catalyst that sets host Maurice BP-Weeks off into exploring the world of debt and how it's leveraged against Black Americans. After exploring the landscape of his own debt and his experiences with it, Maurice talks with Debt Collective Co-Founder Hannah Appel, an economic anthropologist who is an associate professor and the associate director of the Institute on Inequality + Democracy at the University of California Los Angeles. Together they walk through the history of debt as leverage against minority groups and how organizations like Debt Collective are fighting back today.

Can't Pay, Won't Pay: The Case for Economic Disobedience and Debt Abolition, the 2020 book co-edited by Hannah and others from Debt Collective, is available from Haymarket Books.

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Welcome to Indebted, a 10-part, weekly exploration of debt and race in America. This new podcast from Convergence is hosted by economic and racial justice organizer Maurice BP-Weeks. The series begins with his new baby’s first piece of mail: a $4000 hospital bill.

Subscribe now to hear the series premiere, Thursday, September 21st.