E-mail a friendDanny Schechter
airdate April 12, 2007
Danny Schechter is a documentary filmmaker who also writes and lectures on media issues. A two-time Emmy winner, he's produced and directed many TV specials. He is exec editor of the supersite MediaChannel.org and founder-exec producer at Globalvision, an independent TV production company, where he created the award-winning series South Africa Now. Schechter formerly worked for ABC's 20/20 and was one of the first producers hired at then-start-up CNN. In Debt We Trust is his latest film project.
Full interview. (8:39)
Danny Schechter
Tavis: We continue our "Road to Wealth" series tonight with Danny Schechter, Emmy-winning journalist and filmmaker whose latest project takes a look at the growing problem of debt in America. The new film is called "In Debt We Trust: America Before the Bubble Burst." The film opens in select cities this month and next. Here now, a scene from "In Debt We Trust."
[Clip]
Tavis: So Danny, "Before the Bubble Burst?" One could argue that it already has.
Danny Schechter: It has. When I started to make this film people asked me, what are you doing a film about debt about? Nobody's gonna be interested in that. Nobody wants to talk about money. This doesn't affect anybody. What we're seeing now is that this is one of the leading economic crises in our society. Two million Americans face foreclosure in their homes.
Millions of people are straddled with debt. Credit cards started basically as a luxury; they became a necessity, and now they're a noose for many people in our country. College students leaving school with $30,000 in debt; people unable to pay their bills.
This is a really serious case of economic pain on the one hand, and economic gain on the other hand where big companies, financial institutions - banks and the like - are cleaning up at our expense. It's like a vacuum cleaner in many Black neighborhoods, sucking the money out from your pockets into their vaults. It's scary.
Tavis: You've given us some sense of the scope and the size of the problem. Let me back up, though, and get a little bit more basic. What happened? How did we get - as a society, not just Black folks; so many of us in debt - so far off track?
Schechter: Well, our whole economy changed. It changed from a country where the factory was the icon of economic progress and big jobs, big unions, and the like, to a country where the mall is the actual economic generator of activity where people consume as opposed to make things. And this has been a fundamental shift in our economy, it's been an engineered shift as jobs and production has moved offshore to other countries - to China, to other places.
And Americans have been losing jobs but also losing hope in many cases because they're so dependent on free money in the form of debt and they're trying to hold on to what they have. And it's very hard for many people to do so.
Tavis: There are a number of communities that have been targeted by this industry. Let me just pick two or three of them and get your comments on why they've been targeted and how successfully they have been targeted. In no particular order, college students.
Schechter: College students are young; they haven't really had experience in the workplace. They're basically conforming; they're trying to look good and have everything that everybody else has. They're not thinking about the future so much, because they're living in the present. And many of them are running up large credit card tabs and student loans that they're unable to really pay for them.
We're just finding out in New York State and other places that there's a major scandal with these student loans. That colleges and universities themselves are implicated in a corruption scandal involving student loans that kids are paying for. We were at the Rochester Institute of Technology; we showed our film "In Debt We Trust." Twelve hundred kids came, and every one of them had what you call a topper story.
In other words, you think that's bad? Let me tell you about what's happening to me. I'm 10,000 in debt, I'm 20,000. One kid got up there, "I'm $100,000 in debt." It's a really serious crisis, and nobody's helping them 'cause we don't have financial literacy education, which we need very badly.
Tavis: From students to persons of color. You mentioned specifically earlier African Americans. Tell me why communities of color are so targeted by this industry.
Schechter: Well, because people have been down for a long time, and suddenly they have an opportunity to get a nice home, to upgrade their lifestyle, to actually move into a better neighborhood. And they've been given these sub-prime loans, and in fact they're actually paying more for these loans. They're paying more money than you or I might pay if we have a higher standard.
Tavis: These are these payday lenders.
Schechter: No, no, no, no, this is the loan companies, the sub-prime loan companies which have just gone broke.
Tavis: New Century.
Schechter: New Century Financial.
Tavis: Right, right, right.
Schechter: HSBC Bank reported a $10 billion loss. And a lot of these people were offered mortgages that the banks knew they could not afford. They were suckered in, the banks made a tremendous amount of money. Salaries for some of the executives were $50 million or more. It's unconscionable, it's a disgrace, and now these people are being targeted and they're being treated as if they're sub-prime.
As if the people themselves are - blame the people who are responsible for the problem while the banks are able to operate with no regulation and no accountability to consumers, no consumer protection rules.
Tavis: So let me segue then from those sub-prime mortgage lenders to these payday lenders. And I was just reading an article the other day; so many of these - when you do the real homework, you do the due diligence and you find that many of these payday loan companies are owned by some of these banking institutions.
Schechter: We found out, for example, in Bedford-Stuyvesant there were these tax preparation joints which are now being investigated, including H&R Block and Jackson Hewitt, and these companies were actually giving people advances on their tax refunds at a rate of sometimes up to 700 percent annual percentage rate in the interest.
Tavis: That's impossible, Danny.
Schechter: Short-term loans -
Tavis: Seven hundred percent?
Schechter: I'm telling you, this is what it happening. And what's happened is that people are getting in over their heads. So they get money right away so they don't have to wait for the government to give it to them. The government guarantees the payment, and the difference is what the banks are giving. And this is banks like HSBC.
And their business earned them $1.6 billion on these kinds of loans, these kinds of tax refund loans. Payday lending? We went to the Norfolk Navy base for "In Debt We Trust." The lady there at the Marine Corps Relief Society - and usually I wouldn't - the Marine Corps is not, like, one of the places that usually is open to my investigative journalism, but they were so concerned because there are now 26 payday lenders surrounding the base where there used to be three.
So you have a situation where this has grown exponentially. In many Black neighborhoods, banks actually have withdrawn from the community, so there are no banking facilities there, and people are dependent on check cashing joints and other places where they are paying more for everything. The poor pay more to exist and survive in America, and that's why "In Debt We Trust" is important. 'Cause it's not just about somebody else. It's about you, it's about me, it's about our society today and economic inequality.
Tavis: Speaking of society and economic inequality, is it just the least among us, just the weak, just the needy? What about the rest of us? How much debt have the rest of us become burdened with?
Schechter: Well, look, this is a problem in every home in America, this - the end of the month, people are sitting down trying to figure out how to pay their bills. People have gotten in deep, deep debt. They're paying off at interest rates up to 29 percent, which is outrageous, usury. This is what Jesus went into the temple to drive out the money changers.
Tavis: The money changers, yeah.
Schechter: This is what it was about how many thousands of years ago. This thing is repeating itself now, and it's something that everybody's concerned about. Republicans and Democrats, poor and middle class are facing this problem in America, and it's something that we have to do something about. And that's why in addition to the film "In Debt We Trust," we have the DVD out at InDebtWeTrust.com, we have an organization, Americans for Debt Relief Now.
It's like Bono fighting for debt relief in Africa? We're fighting for debt relief in America, and we have a website, StopTheSqueeze.org to try to get information to people about what they can do.
Tavis: In about 45 seconds, what do we do, for starters?
Schechter: Well, first we inform ourselves. That's the first key. You have to arm yourself with information. The second, you have to try to take more responsibility, of course, for your own finances. Third, we have to press our politicians for more regulation in the public interest, consumer protection laws and the like, so that these companies can't get away with this rip-off. This is the biggest bank robbery in the world, except it's not the banks being robbed; we're being robbed (laughs).
Tavis: Investigative journalist Danny Schechter. His new project is called "In Debt We Trust: America Before the Bubble Burst." Opening in select cities this month and next. Danny Schechter, nice to talk to you. Glad to have you here.
Schechter: Great, pleasure, great.
Tavis: Good to see you.
Back to April 12, 2007