Wall Street Journal Review Touts "Legalized Loan Sharks"

06/24/2010 11:27 pm ET | Updated May 25, 2011

I recently reviewed Gary Rivlin's important new book, Broke USA, for the Huffington Post. Thus, I was stunned when I noticed that the book had been reviewed by the Wall Street Journal.

I wondered if the reviewer, Katherine Mangu-Ward, and I had read the same book.

f you go by her philosophy, payday lenders and other members of the "poverty industry" are upstanding entrepreneurs, performing a service for society!

She waits until the second to last paragraph to "mention" that payday lenders are providing this wonderful service at "something like a 300% to 400% interest rate."

Ms. Mangu-Ward makes a historic comparison of those in the "poverty industry" with loan sharks of a different era. I'm not sure that Mangu-Ward, a Yale University graduate, has ever met a loan shark. I have.

As I note in my book Son of a Son of a Gambler, loan sharks and gamblers populated my hometowns of Covington and Newport in Northern Kentucky.

Although the sharks were aggressive in their collections policies, any loan shark who charged 400% would have soon been floating in the Ohio River.

I also doubt that many loan sharks were ever touted for their entrepreneurial acumen in the Wall Street Journal.

The sad thing is that the Wall Street Journal would allow such a slanted and biased reviewer to write a review for their newspaper.

She leaps to conclusions that show a lack of research, especially for a graduate of an Ivy League school.

For example, she said that Rivlin brings "a level of financial illiteracy and disdain for entrepreneurs that is somewhat surprising in a man who once covered Silicon Valley for the New York Times."

If Mangu-Ward had done her homework, she would have read Rivlin's books, The Plot to Get Bill Gates and The Godfather of Silicon Valley. The first book shows Rivlin's tremendous empathy with the featured entrepreneur and the second shows some keen insights into how businesses truly operate.

Anyway, Broke USA is not about entrepreneurism. It's about the poverty industry and how loan sharking has become legalized.

Rivlin devotes much of his book to efforts in North Carolina and other states to offer payday loans at a more reasonable interest rate. He notes how the United States armed services put a 36% cap on any payday loans made to military personnel.

None of that important information made it into a "review" that in the author's mind puts payday lenders in the same category as Mother Teresa: Doing good for the poor.

I don't remember Mother Teresa charging 400% interest rates.

Despite what the Wall Street Journal says, Broke USA is an even-handed look at the poverty industry.

A little even-handedness would have gone a long way in the Wall Street Journal's review.

Don McNay, CLU, ChFC, MSFS, CSSC is an award-winning financial columnist and Huffington Post Contributor.

You can read more about Don at

McNay has Master's Degrees from Vanderbilt and the American College and is in the Hall of Distinguished Alumni of Eastern Kentucky University.

McNay has written two books. Most recent is Son of a Son of a Gambler: Winners, Losers and What to Do When You Win The Lottery

McNay is a lifetime member of the Million Dollar Round Table and has four professional designations in the financial services field.