In January of 2004, James Scurlock W’93 was standing in line for Super Size Me at the Sundance Film Festival and thinking two things. One, Morgan Spurlock had just made the movie he wanted to make, and two, it was going to be a hit.
Momentarily discouraged, Scurlock tried to think of an analogue to the American addiction to fast food. And then it came to him.
“I thought, ‘What are the two New Year’s resolutions Americans always make?’” he recalls. “‘Lose weight, and get out of debt.’”
The result of Scurlock’s brainwave was Maxed Out, a sobering account of the way mounting debt keeps Americans, and their government, in thrall to modern-day usurers. The documentary and its companion book (subtitled Hard Times, Easy Credit, and the Era of Predatory Lenders) paint a grim picture of families rich and poor crumbling under the weight of credit-card bills and mortgage payments—and of a lending industry only too keen to take advantage of them.
Scurlock didn’t start out to make a broadside against the financial industry. In fact, he initially wanted to be part of it. In 1989, he matriculated at Wharton as an undergraduate, with an eye on becoming the next Donald Trump W’68. He was, as he notes in Maxed Out, “idealistic, but in a very non-idealistic way.”
So eager was Scurlock to get his feet wet that he dropped out of Wharton in his senior year to start a fast-food franchise, using an inheritance from his grandfather as start-up capital. Everything seemed to be going well until he opened a second location and realized he was fatally undercapitalized. The business ended up $150,000 in the red.
“It took a year or two to get out of it, and it really terrified me,” Scurlock recalls. “I couldn’t sleep.”
His entrepreneurial misadventure notwithstanding, Scurlock says he’s always been lucky as far as debt is concerned. His college education was paid for in cash, and he’s never taken out a mortgage or put more than $5,000 on a credit card. But he also knows that even the most fiscally responsible person can be bankrupted at a moment’s notice.
“I don’t have any debt,” he says. “I also don’t have any children. I don’t have any medical problems. I don’t have a job to lose. When people say, ‘What should I do to stay out of bankruptcy?’ the answer is: Don’t get divorced. Don’t get sick. Don’t have children. And don’t leave your job.”
Maxed Out is a darker film than the lighthearted satire Scurlock set out to make, and an angrier one.
“Had someone come to me and said, ‘Hey, why don’t you make a film about how the financial industry is systematically screwing people?’ I would have said, ‘I don’t want to do that,’” he recalls. “I wanted to make something funny about people who work at McDonald’s driving Porsches or something.”
But as Scurlock searched for examples of the “$30,000 millionaire,” he kept running into people like Brandie and Will, a young couple living outside of Nashville. When Will was a policeman making $20,000 a year, they were scraping by, paying off a trailer home and racking up credit-card debt. But when Will was called to active duty as a reserve member of the National Guard, their house of cards collapsed. After his initial 179-day deployment (one day short of qualifying for health care) stretched to 23 months, Will was forced to put in for a two-week leave so he could fly back to the U.S. and declare bankruptcy. While funny stories were scarce, Scurlock says, those like Brandie and Will’s “weren’t difficult to find at all.”
What was hard was getting people to talk, especially on camera. Being in debt “is something people are very, very ashamed of,” Scurlock says. “We were interviewing a guy from Debtors Anonymous, and he said, ‘This is the last taboo. I can talk about being an alcoholic, I can talk about being a drug addict, but this is the one thing I can’t talk about.’”
There are stories in Maxed Out worse than Brandie and Will’s, like the mother whose college-age son killed himself after going $12,000 into debt on a dozen credit cards. But although Scurlock argues vigorously that there is no such thing as “good debt,” the movie is more than a cautionary tale about the dangers of excess borrowing or an exercise in sympathy for the less fortunate.
Maxed Out’s most damning accusation is that lenders now seek out people with no chance of paying them back. Their preferred customer is not a gold-card owner who runs up large purchases and pays his bills on time, but one who is stuck paying monthly minimums and finance charges ad infinitum. Most Americans still think they’re living in the era of responsible lending, when credit was a badge of honor, Scurlock says. “It’s not like the banks ever came out and said, ‘We’ve changed. We’re not lending responsibly any more, so watch out.’”
Industry representatives declined to be interviewed for Maxed Out, but Scurlock did spend time with a pair of gung-ho debt collectors who liken themselves to pirates walking debtors to the edge of a plank. With their white Oxford shirts and take-no-prisoners zeal, they have the air of reckless b-school graduates yearning for their first kill.
Scurlock knows the type; in fact, he was the type.
“They reminded me of me,” he says. “You’re ambitious, you’re in an industry that’s making tons of money a year. It’s living the American Dream. When we filmed them, they had five employees; a year later, they had 45. The guy’s driving a 540i BMW; he’s got a hot girlfriend, going to all the hot clubs. He’s not thinking about people who can’t pay for their kids’ medical problems.”
But with the turmoil in the subprime mortgage market, even the collectors are starting to take notice. Scurlock was recently invited to show the film at a debt-collectors’ convention, where he sold out of books after the screening.
“They were really concerned, and these are people who are vilified in the film,” he says. “They were telling me, ‘You know, these are big issues for us as well.’ If there’s nothing to collect, they’re out of business. If you push people too hard, they’re gone.”