When Hurricane Katrina ravaged America's Gulf Coast, it laid bare an uncomfortable realityAmerica is not only far from the world's wealthiest nation; it is crumbling beneath a staggering burden of individual and government debt.
Maxed Out takes us on a journey deep inside the American debt-style, where everything seems okay as long as the minimum monthly payment arrives on time. Sure, most of us may have that sinking feeling that something isn't quite right, but we're told not to worry. After all, there's always more credit!
Maxed Out shows how the modern financial industry really works, explains the true definition of "preferred customer" and tells us why the poor are getting poorer and the rich getting richer. By turns hilarious and profoundly disturbing, Maxed Out paints a picture of a national nightmare which is all too real for most of us.
Maxed Out begins as Beth Naef, one of the most successful real estate brokers in the country's hottest real estate market, Las Vegas, gives us a tour of a $5.5 million spec house. What's important to her clients, she says, are elevators, massive kitchens and wine cellars. Beth is building a ten-thousand square foot McMansion of her own, a home she admits she won't be able to afford if interest rates go up. But, as she concludes, "if you look like you make money, I guess eventually you will."
Maxed Out reveals the secrets of the new bank. John Ballew, a Midwestern banker whose neighborhood bank has been merged so many times he's lost count, tells us why suggestive selling is the primary qualification for working at a modern bank. Bud Hibbs, a well-known consumer advocate and the collection industry's enemy number one, explains why banks want us to be late. Liz Warren, a Harvard Professor who conducted the largest study of why Americans are going brokeat a rate higher than during the Great Depressiondebunks the conventional wisdom that only "bad apples" declare bankruptcy. Liz's study proves that the bare necessities, not Prada shoes, are killing American families. A lifelong Republican, Liz's foray into the world of debt changed her politics and inspired a best-selling book: "The Two Income Trap".
Maxed Out reveals that the financial industry's best customers are the broke and the bankrupt. The most profitable niche of the industry is called "alternative" or "sub-prime"euphemisms for a business formerly known as loan-sharking. They target those with less than perfect credit-people like Mark Mumma, whose frustration with the sub-prime credit card issuer Providian caused him to start the website www.providianfinancialsucks.com. From 2000-2002, Providian paid over $400 million to settle charges that it defrauded its customers. Soon after, a Providian director and the chairman of its compliance committee was appointed corporate crimce czar by George W. Bush.
Maxed Out exposes the modern debt-style in all of its absurdities and contradictions. Nowhere are these more evident than in a journey with award-winning investigative journalist Mike Hudson, who travels to Mississippi, Pittsburgh, and New York City interviewing the victims of predatory lending scams. The most shocking discovery? The predators aren't boiler rooms or goodfellas. They are the nation's largest and most respected financial institutions! And they're not just preying on adults anymore. In 2001, FirstUSA hired two teenage high school students as walking billboards to make their cards seem "cool". FirstUSA also pioneered "partnerships" with collegespaying them millions of dollars for access to their students' personal information, setting these kids up for ruin.
Maxed Out examines an industry that thrives on making people fail, then pursues them relentlessly to death's door. The film features a shocking interview with Bob and Christwo idealistic entrepreneurs from Minneapolis whose "People First Recoveries" is buying bad debt all over the country in the hopes of huge profits. They're going to make "People First" a big success by being shockingly duplicitous. To get psyched up, Chris and Bob imagine themselves as "debt pirates", wrestlers and professional football players. The personal information at their disposal and the ways in which they are allowed to use itcalling people's neighbors and relatives to humiliate them into paying, for exampleare nothing short of terrifying for us, fun for them.
Maxed Out delves into the heart of the information business. David Szwak, a prominent Shreveport attorney, reveals that 90 percent of credit reportsthose forms that now determine whether we get a job, a home and insurancehave errors on them, yet the credit bureaus aren't doing anything to correct the situation. Why not? The more negative information, the higher the interest rate and the greater the industry's profits. If you dare challenge the industry, as did one woman whom the credit bureaus listed as "deceased", industry goons are dispatched to wear you down. Szwak also reveals a little known but troubling fact: the credit bureaus keep a special "V.I.P." list of prominent citizens whose reports are specially cleaned up. This protects the industry from legislative or judicial action and keeps those in power from knowing how flawed the credit system really is.
Finally, Maxed Out explores the financial industry's influence over the President and Congress. When you are the largest contributor to a President's re-election campaign, you can not only write laws but you can eliminate one of the oldest federal rights: bankruptcy. The industry gets whatever it wants. The result? Traditional protections disappear. The rich get richer and the poor get poorer. The situation becomes even more absurd as George W. Bush implores Congress not to leave Iraqis with debt at the same time National Guardsmen are forced to declare bankruptcy in Baghdad and the average American household's share of the national debt rockets to nearly $90,000.
At times hilarious, at times deeply disturbing, Maxed Out forces us to face the consequences of our national debt addiction: the suicides, the ruined lives and, ultimately, the disappearance of the American middle class.