pluralistic | The zombie economy shambles on. Obama's loan-shark bailout and the eviction crisis let the architects of subprime buy up whole towns' worth of homes and turn them into hugely profitable slums: high-rent, low-quality deathtraps.
https://www.reuters.com/investigates/special-report/usa-housing-invitation/
Wall St landlords package rents from subprime rentals into bonds, backed by the loan-shark's guarantee: arm-breakers will evict the shit out of anyone who stops paying.
America-a land where eviction was once a rarity-now faces an eviction epidemic.
https://www.newyorker.com/magazine/2016/02/08/forced-out
The foreclosure crisis was only possible because Wall St and the courts collaborated to streamline the historically complicated and time-consuming process of taking away someone's home. Same goes for the eviction epidemic.
It's a simple equation: the more loan-sharks spend on arm-breakers, the lower the expected profits.
Improvements to arm-breaking processes – cost-savings on traditional coercion or innovative new forms of terror – are powerful engines for unlocking new debt markets.
When innovation calls, tech answers. Our devices are increasingly "smart," and inside every smart device is a potential arm-breaker. Digital arm-breakers have been around since the first DRM systems, but they really took off in 2008.
That's when subprime car loans boomed. People who lost everything in the GFC still needed to get to work, and thanks to chronic US underinvestment in transit, that means owning a car. So loan-sharks and tech teamed up to deliver a new lost-cost, high-efficiency arm-breaker.
They leveraged the nation's mature wireless network to install cellular killswitches in cars. You could extend an unrepayable loan to a desperate person, and use an unmutable second stereo system to bombard them with earsplitting overdue notices.
https://edition.cnn.com/2009/LIVING/wayoflife/04/17/aa.bills.shut.engine.down/index.html
If they didn't pay, you could remotely cut off the ignition and send a precise location to your repo man.
Smart killswitches let you impose fine-grained control over debtors – say, enforcing a rule against driving over the county line.
https://dealbook.nytimes.com/2014/09/24/miss-a-payment-good-luck-moving-that-car/
Within a decade, the bond-market for payments from subprime car drivers was edging up on $1T; not because borrowers didn't default, but because they defaulted later, and the car could be easily re-leased to another desperate person.
The zombie economy shambled on. Tech built undeletable, always-on kill-switches, lo-jacks, and spyware into an ever-expanding constellation of devices, like laptops.
https://www.theatlantic.com/technology/archive/2016/04/rental-company-control/478365/
Rent-to-own subprime laptops were the epicenter of innovation in digital arm-breaking. Laptops shipped with spyware for covert operation of cameras and mic and access ot files.
That went beyond repoing a laptop! Lenders could make and share covert sex-tapes of their customers!
They spied on children, plundered MP3 collections, stole passwords, read email. It was beyond the wildest dreams of analog loan-sharks.
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