5 Organizations That Gamed the System and Screwed the Public
Nobody likes being scammed. It turns you into a victim, it shakes the foundations of your inherent trust in your fellow man, and, most importantly, it usually involves relieving you of your precious money. That's your favorite stuff! But sometimes, when a scam is clever enough, you almost don't mind being ripped off. Sure, it still sucks that you're out some ramen funds, but you have to admire the ingenuity of the con, right? Now, what happens when those clever little scams are being run not by lovable street urchins with rigged card games, but gigantic heartless corporations?
Goldman Sachs Takes America for a Ride on the Aluminum "Merry-Go-Round"
Think back to when life was all Pop Rocks and comic books and hilariously incorrect assumptions about sex. Your insatiable need for said Pop Rocks and comic books that inadvertently reinforced all that incorrect sex stuff -- it all required money. And earning that money, your allowance, required you to do chores, like clean your room. So you'd shuffle all your toys from the floor to the closet. Then your mom would discover that you'd transformed your closet into a barely contained plush-and-plastic avalanche, and you'd shuffle all your stuff underneath your bed. Then your mom would discover all the crap you'd crammed underneath your bed, and the process would repeat in a never-ending cycle of filth and lies. Such is childhood.
Except for the porn, which was crammed underneath your brother's bed.
For years, Goldman Sachs used the method we just described to ever so gently dry hump your wallet whenever you popped open a can of soda. We're talking about the aluminum trade, and over the past three years Goldman and their cohorts have managed to fleece American soda connoisseurs out of more than five billion dollars of hard-earned drink machine change.
First, Goldman bought out all the Detroit-area warehouses where bulk aluminum was stored. Then they effectively drove up the worldwide price of the metal by artificially increasing the wait times for aluminum orders more than tenfold. But they couldn't just perpetually stockpile the aluminum and let the prices climb ever higher, because there were regulations in place requiring them to ship a certain amount of it each day. So ship it they did ... to another warehouse. That was also owned by Goldman. From the closet, to the bed, to your stupid sister's room (fortune favors the bold), and back to the floor. Repeat. The price of aluminum went up, Goldman collected rent on it for the entire time they shuffled it among their many warehouses, and you eventually paid more for that can (via increased soda prices) -- win-win-lose!
"One for you, one for me. Two for you, one, two for me."
While the average cost to the consumer was miniscule -- only about a tenth of a cent per can -- the industry used so much aluminum that Goldman almost certainly built a Scrooge McDuck-style money bin with the profits. We're trying to muster up some outrage -- but honestly, who could stay mad at Goldman, with those dimples, and Sachs, with his puppy dog eyes. The little scamps!
Mortgage Lenders Haunt Cash-Strapped Homeowners With Zombie Titles
In the midst of the economic fallout that rained down after the U.S. housing H-bomb blew sky high in 2008, banks realized something: Foreclosures are hard. There were all those notifications to send to the homeowner, the legal red tape to work through to actually repossess the house, and then the actual auctioning off of the house -- that's a whole boatload of work, and work is work. You know what's much, much easier? Telling the homeowner you're going to foreclose, and then never following through with it.
In financial circles, this is known as "The Milton Strategy."
And thus, the zombie title was born.
See, rather than repossessing and selling off the homes of people who could no longer afford payments, mortgage lenders started telling people they were going to repossess their homes, and then muttered "psyche" under their breath with their fingers crossed. So the homeowners would clear out and find other places to live, only to be stalked by debt collectors -- in some cases even threatened with jail time -- for not paying fees or managing the upkeep on properties they thought they no longer owned. The offending banks, on the other hand, not only didn't have to swallow the costs of selling a house at drastically reduced rates, but also got to claim tax benefits and other financial compensation for a foreclosure that never really happened. Then, when lenders refused to take responsibility for the homes they never actually reclaimed, municipalities ended up shelling out taxpayer dollars to keep the abandoned houses from falling into disarray. And by "falling into disarray" we mean "friggin' exploding," which has happened to several of these "foreclosed" houses when the natural gas supply was left on. Zombies and explosions?
Welcome to the exciting world of pseudo-legal mortgage fraud!
Payday Lenders Use Native American Tribal Sovereignty to Dodge Interest Rate Restrictions
You may recognize the term "payday loans" from the flashing neon sign in the window of that run-down gas station you pass on your way to work -- you know, the one that causes you to compulsively lock your doors every time you pass? In case you've never had the misfortune to find yourself tragically short on hooker money, a payday loan is a short-term loan designed to help those strapped for cash make it to their next check. The catch? A ridiculously high interest rate that helps ensure that the people the loans are targeted at -- the poor -- stay that way. Luckily, there are laws in place to make sure such operations can't charge overly exorbitant interest rates -- in New York, for example, the maximum allowed is 25 percent. But to some truly savvy lenders, there's an easy way to work around these limits in order to keep exploiting destitute Americans, and that's by exploiting destitute Native Americans.
Because that's never backfired.
It works on the same principle that allows Native American tribes to erect an enormous casino right in the middle of a state where gambling is illegal. The tribes are immune to many state laws, especially pertaining to finance: It's sort of the consolation prize the white man gave them for coming in second in the genocide marathon. Well, payday lenders figured out that some financially struggling tribes just don't have the knack to run a decent casino (it takes a certain kind of person to schmooze with Tom Jones), so they began enticing the tribes into a new money-making endeavor: Internet payday loans.
Once the payday lender finances a new "tribal lending entity" under the tribe's name, they inherit the tribe's sovereign immunity, and they're free to ream borrowers with interest rates as high as 782 percent. So why don't state or federal officials crack down on these unfair lending practices? Well, some say it's high time to do just that, but it's not quite so cut-and-dry. Remember, the tribes that enter into these deals are not exactly rolling in the dough otherwise, so whichever side a lawmaker chooses, they're screwing someone. So the choice is really between screwing the other-American poor or screwing the Native American poor. And that, uh ... that is a choice that has not historically gone in the favor of the Native Americans.
Amazingly, calling it a "treaty" did nothing to improve their outlook.
Bus Companies Fix Dangerous Vehicles (by Repainting Them)
Curbside buses are up to seven times more likely to be involved in fatal accidents than those of standard commercial carriers. Not to worry, though -- regulators are quick to shut those deathtraps down. And keep them that way ... until they get a new coat of paint. In which case, back to the road with you, jalopy! The people have to get where they're going, and if they loved their intact organs so much, they'd buy a Mercedes.
And if they're so hungry, why don't they just eat something?
It's estimated that close to 10 percent of buses have failed safety inspections, then been secretly camouflaged and put back on the road, in some cases even after they've already been involved in deadly accidents. That's not just unsafe mechanically, that's unsafe spiritually. We've seen Ghost Dad, we know all about the close association between restless spirits and public transport, thank you.
That's not the only way unsafe public vehicles get back on the road: The criminally ambitious owner of New York Party Shuttle (because nothing says "party" like cracked vertebrae!) invented whole new ways to flip safety regulations the flying, backhanded double bird. He designated his vehicles as tour buses (which are unregulated), used a third party to sell tickets online, and rebranded his company as a travel agency -- all to keep from having to comply with safety inspectors. Hey, you know what they say: You can't make an omelet without breaking a few eggs.
And you can't keep a travel agency in business these days without some shady-ass dealings.
You're the egg in that idiom.
The Industrialized World "Donates" Shit-Tons of E-Waste to Poor Countries
As Americans, we each possess the inalienable right to life, liberty, and the pursuit of the latest iPhone. But last year's model is 1/16th of an inch thicker than the new one, so clearly it's garbage and it's time to send it off to the recycling center. Hey, you do your part. You always recycle. You're not a monster.
Aaaand now you've had a hand in poisoning a Third World country.
All without lifting a finger.
Until very recently, the standard operating procedure for many Western recycling companies was to ship e-waste off to developing countries, which was up to 10 times cheaper than processing the various toxic materials found in electronics the proper way. But why would Third World nations want to take on all of our discarded gadgets in the first place? Simple: To you, a two-year-old phone is an ironic paperweight, but it's state-of-the-art to someone whose previous form of communication was yelling really loudly. So the trick to offloading e-garbage is to take a few desirable working items, like phones or desktops, then shove them deep into a junk pile of goods you know for a fact are broken. You label the whole shebang as a "donation," and boom: They're shipped off to the exotic land of Notyourproblemistan.
How bad is it? In 2006, it was estimated that as much as 75 percent of the electronics shipped to one major hub in Nigeria were useless junk. Even India, which passed laws specifically forbidding the importation of e-waste, is buried in up to 50,000 tons of e-waste every year. So why on Earth are you still recycling? Are you trying to make Captain Planet cry?
And if you do that, you know you'll be the one who ends up with "Heart."
A.C. Grimes is a raving Cracked fiend who enjoys writing. Feel free to check out his various observations and whacky compositions here.
Related Reading: Speaking of shifty organizations, Biology Online called some woman an urban whore for not writing free stuff for them. Some legitimate organizations even act like mob guys, including drug rehab clinics who invent patients to make tax dollars. A few great organizations have a reputation for evil they don't deserve. Like insane asylums.