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Why no populist outrage? We are indentured.
Today in the New York times Bob Herbert laments about changing the world. Bob is very disturbed that we seem to be so passive in the face of our crumbling society. There are many likely causes to this 'paralysis', but here I would like to argue one that I don't think gets much attention- Debt.
Herbert opens with a the tragic story of Andrew Goodman- a young idealist who went to Mississippi in 1964 to fight on the front lines of the Civil Rights campaign, but was then murdered by the Ku Klux Klan. He contrasts this sad, but noble story with today's society.
Occasionally we did refi that mortgage to buy that new car or max out the credit cards for that vacation. We didn't mean to, but everybody was doing it and prices of everything just kept rising, but wages just didn't seem to keep up. So we sometimes dipped into the house equity (after all we did it once in the 90's and everything seemed fine), or pulled out the credit cards- we started relying on it even though we knew it was wrong. I think this is a reason why a lot of Americans don't feel they can say anything, or are too scared to rock the boat. It is because we are deep in debt and just praying it will go away.
If we make a lot of noise then soon you will ask us our personal situation and yes, we know, we made mistakes. Not only do we have that house to pay for- but also that occasional luxury we couldn't quite afford and always knew that their would be a payback- and now it has come. So we shut our mouths.
But there is another aspect of our shift into an indebited society that is retarding the development of social movements. This is one where the victims didn't get to enjoy much of the 'party'. Times have advanced in the forty ought years since Berne published and today debt is much more widespread. And thanks to the miracles of financial innovation we also have debt instruments like 7 year auto loans, credit cards given to you for your 18th birthday, and most pernicious to democratic society: Student Loans.
In human society it is usually the youth that are the agents of change. With their invincibility complexes and zealous idealism kids like 20 year old Andrew Goodman are willing to go out and try to make a difference in the world. These are the ground soldiers who do the grunt work and provide the energy to social movements that Bob Herbert pines for. But today, like those New Guinea husbands strangled by the guilt strings of the dowry, we trap those kids in deep in debt, usually well before they are fully developed enough to rent a car.
The average undergraduate student graduates with nearly 23,000 in student loan debt, graduate students 45,000 (bonus debt: half of all undergrads have 4 or more credit cards!- with an average debt of $3,173). Don't even ask about our doctors or lawyers-suffice to say that they aren't going to be volunteering much. And taking that public service job is akin to the priesthood lifetime vow of poverty.
Jeffrey Willams recently put forth a provocative article in Dissent Magazine, Student Loan and the spirt of indenture. In it he examines student loans as a new form of indentured servitude. Both targeted the upward mobility desires of the working class, both had large middleman industries that developed that profited immensely for little risk (or in today's case- No Risk!!), both are for set lengths of term, and most significantly both are debt secured not by property but by personhood- with NO LEGAL RECOURSE (unlike all other debt- you can not bankrupt from student loans).
And your parents- well they deserved it. They shouldn't have borrowed that money either. Sure they felt guilty that they wanted to provide you with more then they could afford but now its payback time. Maybe they started that business that couldn't make it, or god forbid tried to flip a house at the end of the bubble.
Here are some more Credit Card stats (there are lots more on this site).
(Update- I corrected the spelling of Andrew Goodman (not Goldman)
Herbert opens with a the tragic story of Andrew Goodman- a young idealist who went to Mississippi in 1964 to fight on the front lines of the Civil Rights campaign, but was then murdered by the Ku Klux Klan. He contrasts this sad, but noble story with today's society.
Americans have tended to watch with a remarkable (I think frightening) degree of passivity as crises of all sorts have gripped the country and sent millions of lives into tailspins. Where people once might have deluged their elected representatives with complaints, joined unions, resisted mass firings, confronted their employers with serious demands, marched for social justice and created brand new civic organizations to fight for the things they believed in, the tendency now is to assume that there is little or nothing ordinary individuals can do about the conditions that plague them.
This is so wrong. It is the kind of thinking that would have stopped the civil rights movement in its tracks, that would have kept women in the kitchen or the steno pool, that would have prevented labor unions from forcing open the doors that led to the creation of a vast middle class.Bob then pivots to shift the blame where he thinks it lies:
This passivity and sense of helplessness most likely stems from the refusal of so many Americans over the past few decades to acknowledge any sense of personal responsibility for the policies and choices that have led the country into such a dismal state of affairs, and to turn their backs on any real obligation to help others who were struggling.I am not so sure that that is the correct diagnosis, in fact I think personal responsibility might be at the heart of our passivity. In 1964, the same year that Andy Goldman set out to fight for civil rights, Eric Berne wrote a bestselling book, Games People Play. In it he identified 5 life games, or patterns of behavior that are often destructive and can bedevil individuals throughout their lifetime but they have hidden psychological rewards. Berne's fifth game, Debtor:
"Debtor is more then a game. In America it tends to become a script, a plan for a a whole lifetime just as it does in some of the jungles of Africa and New Guinea. There the relatives of a young man buy him a bride at an enormous price putting him in their debt for years to come. In America the big debt is a mortgage: the role of relatives is taken by the bank. Paying off the mortgage gives the individual a purpose in life."Margaret Atwood (whose book Payback I lifted the above reference from) points out that Mortgage means "dead pledge" in French (How especially fitting today that 1 in 5 owe more then their houses are worth, and 1 in 9 is in foreclosure). Bob asks where is the sense of outrage and I think that part of it is that we are scared to lose what little we have. But I also think that there is a sense of shame that causes us to clam up. Not shame for the country, but shame that we did actually take advantage.
Occasionally we did refi that mortgage to buy that new car or max out the credit cards for that vacation. We didn't mean to, but everybody was doing it and prices of everything just kept rising, but wages just didn't seem to keep up. So we sometimes dipped into the house equity (after all we did it once in the 90's and everything seemed fine), or pulled out the credit cards- we started relying on it even though we knew it was wrong. I think this is a reason why a lot of Americans don't feel they can say anything, or are too scared to rock the boat. It is because we are deep in debt and just praying it will go away.
If we make a lot of noise then soon you will ask us our personal situation and yes, we know, we made mistakes. Not only do we have that house to pay for- but also that occasional luxury we couldn't quite afford and always knew that their would be a payback- and now it has come. So we shut our mouths.
But there is another aspect of our shift into an indebited society that is retarding the development of social movements. This is one where the victims didn't get to enjoy much of the 'party'. Times have advanced in the forty ought years since Berne published and today debt is much more widespread. And thanks to the miracles of financial innovation we also have debt instruments like 7 year auto loans, credit cards given to you for your 18th birthday, and most pernicious to democratic society: Student Loans.
In human society it is usually the youth that are the agents of change. With their invincibility complexes and zealous idealism kids like 20 year old Andrew Goodman are willing to go out and try to make a difference in the world. These are the ground soldiers who do the grunt work and provide the energy to social movements that Bob Herbert pines for. But today, like those New Guinea husbands strangled by the guilt strings of the dowry, we trap those kids in deep in debt, usually well before they are fully developed enough to rent a car.
The average undergraduate student graduates with nearly 23,000 in student loan debt, graduate students 45,000 (bonus debt: half of all undergrads have 4 or more credit cards!- with an average debt of $3,173). Don't even ask about our doctors or lawyers-suffice to say that they aren't going to be volunteering much. And taking that public service job is akin to the priesthood lifetime vow of poverty.
Jeffrey Willams recently put forth a provocative article in Dissent Magazine, Student Loan and the spirt of indenture. In it he examines student loans as a new form of indentured servitude. Both targeted the upward mobility desires of the working class, both had large middleman industries that developed that profited immensely for little risk (or in today's case- No Risk!!), both are for set lengths of term, and most significantly both are debt secured not by property but by personhood- with NO LEGAL RECOURSE (unlike all other debt- you can not bankrupt from student loans).
College student-loan debt has revived the spirit of indenture for a sizable proportion of contemporary Americans. It is not a minor threshold that young people entering adult society and work, or those returning to college seeking enhanced credentials, might pass through easily. Because of its unprecedented and escalating amounts, it is a major constraint that looms over the lives of those so contracted, binding individuals for a significant part of their future work lives. Although it has more varied application, less direct effects, and less severe conditions than colonial indenture did (some have less and some greater debt, some attain better incomes) and it does not bind one to a particular job, student debt permeates everyday experience with concern over the monthly chit and encumbers job and life choices.But that is the cost of getting ahead if you are middle class here in America, so shut your mouth. You signed on that line. Take responsibility for your actions, and whatever you do don't yell at your betters- you need them to give you a job.
And your parents- well they deserved it. They shouldn't have borrowed that money either. Sure they felt guilty that they wanted to provide you with more then they could afford but now its payback time. Maybe they started that business that couldn't make it, or god forbid tried to flip a house at the end of the bubble.
Here are some more Credit Card stats (there are lots more on this site).
At the end of 2008, Americans' credit card debt reached $972.73 billion. The average outstanding credit card debt for households was $10,679 at the end of 2008.
The average credit card indebted young adult household now spends nearly 24 percent of its income on debt payments.And small businesses (which comprise 70% of US jobs).
44 percent of small-business owners identified credit cards as a source of financing that their company had used in the previous 12 months --- more than any other source of financing, including business earningsSo America shuts up, because we know- its our fault.
(Update- I corrected the spelling of Andrew Goodman (not Goldman)
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Well said.
Possible (likely) effect of loaning tuition of even govt paying it is the upward encouragement on tuition cost. Instead of funding universities and requiring them to accept students (UK and many European, as I understand it), we let universities set their own prices and we simply pony up the dough.
Four yrs of Indiana University was roughly $100,000 including room/board in 2000.
And we are learning what those credit scores really meant, as BoA and Citi move to charge cardholders that don't earn the banks enough because they don't run up balances and late fees. When you close an account you no longer use it gets charged against your credit score, that is pushes it down. This because it means you are worth less to loan issuers if you are too good at paying off debt.
October 27, 2009 6:27 PM | Reply | Permalink
The industry refers to those of us who pay our credit card bills off too soon as "deadbeats." Hmmm.
I think it was on Frontline: 'The Secret History of the Credit Card.' What an eye-opener. Citibank hunted for states with no anti-usury laws, and found South Dakota, I think, and then Delaware repealed their usury laws to accomodate bankcards, and bingo, they were off to the races.
I think Elizabeth Warren was interviewed for it.
http://www.pbs.org/wgbh/pages/frontline/shows/credit/
Good work, Saladin, and thank you.
October 27, 2009 7:05 PM | Reply | Permalink
You're absolutely right, Wendy. Over the past 25 years, all the marbles in credit and banking shifted to the industry side. Credit and debt no longer mean what they did 45 years ago, when Berne went overboard in his backwards diagnosis of the mortgage trap; I think Berne saw marriage and homeownership as the original sin, so any means to those ends were infected by bourgeois evil. Debt as purpose in life? Excuse me, I gotta wipe off some of this projectile contempt!
The set-up that has trapped Americans so deeply in debt was applied to them, by a ravenous financial industry and their legislative enablers, beginning with implementation of the adjustable interest rate. Since the meltdown began last year, there's been an ugly campaign to blame it all on average Americans who committed the unpardonable crime of wanting a roof over their heads.
Why no outrage? Where is our bully pulpit? Where are our "activists"? While the Right sees "average Americans" as limitless piggy banks, the Left drenches them in contempt, as little more that shiftless, selfish peasants guilty of all national sin, past and present, real and imagined. For the Left, "American populism" is nothing more than synonym for "racism".
Sometimes, I wonder if the motivations driving the Right and Left are so different, and this is one issue that seems "fuzzy". Maybe questions of purpose are best put to our trust-fund revolutionaries, themselves.
Otherwise, great post, Saladin.
October 28, 2009 10:37 AM | Reply | Permalink
That is a very interesting take on the two sides. I am inclined to agree, particularly with the Left's schizophrenia on american populism. I suspect many around here are somewhat guilty of that. We want them outraged-but at the politically correct targets.
October 28, 2009 4:54 PM | Reply | Permalink
Nice piece, Sal. I've never quite gotten around to my draft blogs on "indentured servitude" and the "graduate tax," and certainly had never thought to bring them together. Well done.
The Grad Tax - bring it on. Get rid of the upfront debt/loan fear that affects so many kids... get rid of that too large repayment burden when you're just out of college... just raise taxes 2%-4% or whatever and be done with it.
October 27, 2009 6:48 PM | Reply | Permalink
I would be absolutely fine with that. Instead, we slouch, no stampede towards becoming India, accelerate income inequality in the name of fair efficiency or whatever.
What is really sickening to me is the gross profits the middlemen make for literally no risk- the government guarantees the loans.
And can anyone tell me how on earth these loans became to be excluded in bankruptcy? WTF is that about? Even the founders knew that bankruptcy was critically important to a functioning economy (US constitution: article 1 section 8).
October 27, 2009 7:02 PM | Reply | Permalink
More founders wisdom:
October 27, 2009 7:08 PM | Reply | Permalink
Get rid of the credit score. Or make the Fair Isaac code public source. Return to traditional lending.
October 27, 2009 7:21 PM | Reply | Permalink
and we are learning what those credit scores really meant
Yeah Tom that is a really good point. They have so many running dogged to 'protect our credit scores', the game is rigged to maximize profit.
There are bank credit card strategies out there with the sole intention to turn you into an annuity. They lend you to the max that they think you can pay minimum monthly payments on and then just ride you for your whole life. Never to be free.
October 27, 2009 6:48 PM | Reply | Permalink
This is exactly what my current novel is about. Whenever fortune favors and I write "THE END" on the draft, I would love to send you a copy.
It is exactly about the socioeconomic factors that have rendered revolution abstract. There is the credit score, debt, the ever-expanding field of education and training... in other words, the goalposts of success and stability are being shifted and made volatile so that no one is ever quite sure that they foundational needs are taken care of... it is as if the GRUNCH of Giants has understood the Mavlovian pyramid and purposely undermined our core needs so that we haven't the time or incination to FIGHT FOR WHAT WE BELIEVE IN.
October 27, 2009 7:20 PM | Reply | Permalink
Put me on your mailing list, too, Zipperupus. My army of sock-puppets on Amazon is already cheering!
October 27, 2009 7:51 PM | Reply | Permalink
the ever-expanding field of education and training.
Boy ain't that the truth. Once upon a time High School meant something, then there was the Bachelor's and now everybody knows that it is graduate school that matters. But be careful- its a very fine line to becoming over qualified.
And if you work in the corporate world there is a regular alphabet soup of letters to post script your name, and of course all the certifications that you must achieve. That is if you are lucky to have one of those relatively prestigious jobs.
I am really looking forward to your book.
October 27, 2009 8:09 PM | Reply | Permalink
I'll buy whatever you're writing, Zip! I've always found your stuff here excellent, so why would a book be less then great?
October 28, 2009 1:43 AM | Reply | Permalink
Ditto.
October 28, 2009 10:18 AM | Reply | Permalink
I love the link that you make between complacency and indebtedness. I often worry about our country's future as it seems not to think about debt's long term effects (mainly, interest). But I've never thought about its impact on the spirit.
October 27, 2009 7:27 PM | Reply | Permalink
We always framed it in different words; keep the people hustling just to pay their monthly bill, with maybe a job and a half. They will be too fucking worn out to protest anything. (the impolite version of Saladin's good post.)
October 27, 2009 7:55 PM | Reply | Permalink
Either way, it's the truth, Wendy.
October 28, 2009 2:55 AM | Reply | Permalink
really good point.
October 28, 2009 2:34 PM | Reply | Permalink
That is exactly what it is. Indentured servitude.
THE MODERN SLAVE
BY SAL
October 27, 2009 7:27 PM | Reply | Permalink
http://www.youtube.com/watch?v=boXa8c6OuRQ&feature=fvw
October 27, 2009 8:25 PM | Reply | Permalink
Nice link, Lulu!
Another day older and deeper in debt.
Its not just for working folks anymore.
October 27, 2009 9:39 PM | Reply | Permalink
I still prefer Tennessee Ernie Ford on this one. One of my favorites from early childhood. Especially the way he ends it.
http://www.youtube.com/watch?v=zUpTJg2EBpw
October 28, 2009 4:26 PM | Reply | Permalink
I couldn't agree more. I've been telling people this for years... usually I receive a look of astonisment mixed with the most cynical and sarcastic expression of "Eureka" you can imagine.
Sure... you can have that credit card.
Sure... you can have that car.
Sure... you can have that house.
Sure... you can have those appliances
Sure... you can have that nice TV
OOOoooops. Now you're fucked!
Now were gonna turn the screws on you.
Now were gonna start taking more and more power away from you.
Now were gonna start taking your rights away from you...
But you won't speak up. You won't take the day off to go march in the streets. You won't get out of line, will you?
No. Of course not. You need that job too much!
You're just barely living paycheck to paycheck as it is... What would happen if you lost that job?
Well...
Here's the thing. A LOT of people have lost that job. They have lost that house and that car... and that TV.
There are more people joining those ranks every day.
There WILL come a tipping point where people are free to march and protest to their hearts content because they have NOTHING LEFT TO LOSE!!
I don't think we're there yet... But if the bleeding doesn't stop, we will get there, I assure you.
When enough people go bankrupt... when enough people lose their job... when enough people just get royally screwed... they will reach their limit.
Then what?
October 27, 2009 8:43 PM | Reply | Permalink
I make a fortune at pitchfork sales?
October 27, 2009 9:20 PM | Reply | Permalink
Yez! Can I be the west coast disturber?
October 27, 2009 9:56 PM | Reply | Permalink
No...not slave. Even slaves will revolt against their masters at some point. Zoned out and drugged out on videos, computers, cell phones, junk food, anti-depressants...you name it.
We have become a Huxley-ist society. Brain washed by our educational system and drugged with our own brand of Soma to keep us in line and compliant.
C
October 27, 2009 8:50 PM | Reply | Permalink
Good point!
You know...
A few years ago I read the UNHOLY TRILOGY
1984
The Handmaidens Tale
Brave New World
I gave my brain a charlie horse and haven't been the same since.
You've hit on the Brave New World aspect of it all. Take these pills. Specialize in this one thing. Be distracted by "Fun".
Hyxley-ist is certainly a good way to put it.
October 27, 2009 8:54 PM | Reply | Permalink
correction: The Handmaids Tale
October 27, 2009 8:56 PM | Reply | Permalink
Yes, I am quite a fan of Margaret Atwood.
October 27, 2009 9:50 PM | Reply | Permalink
That's all I could think about when Bush got elected.
October 27, 2009 10:49 PM | Reply | Permalink
TPM cafe maybe? Shit. I am caught!!!!
C, I have much sympathy with this perspective but i think it only captures a portion of the apathy (and how could you miss the IV drip that is television).
As I stated at the very beginning I am only arguing here that Debt is one source, both the shame and the indebted we put on our students.
I have not heard anyone talk about the ramifications of all the debt that we incurred in the bubble. For the Rich they get TARP, but wealth creation starts at the bottom and we have salted our fields.
October 27, 2009 9:34 PM | Reply | Permalink
Sal, this is precisely it. I have been doing some thinking and writing lately about how people who purchased home(s) or for that matter, ran up debt during the bubble were actually acting on faith, because of the weird way that capitalism has gotten mixed in with religion in America.
"Sure, maybe the details aren't quite on the up and up but by golly, this is capitalism, we're just pushing the capitalist edge. It's American as apple pie." And since success equals goodnes, then searching out financial success is the same as searching out goodness. People operated on the belief that "the market" would take care of it all in the end.
Of course, the opposite is true: financial failure equals sin, and sin equals financial failure. Being ashamed of not being rich enough to buy what we want, we sin a bit by dipping into our equity or available credit, then feel ashamed about having done so. It's a downward spiral, and you are right that people who would otherwise speak out just clam up, because to do otherwise would be to wear the Capitalist equivalent of Hawthorne's giant red A.
Nothing is as effective at keeping people quiet as making them feel bad about themselves.
Maybe now that so many "respectable" people are losing their homes and drowning in debt, we'll wise up, stop reprimanding other minor sinners, and focus on the big players.
October 28, 2009 3:13 AM | Reply | Permalink
We can hope.
to wear the Capitalist equivalent of Hawthorne's giant red A.
That is a great image. Bankruptcy? Foreclosure? The sub 600 credit score?
What is really grating is how the rules are different for the big players, bankruptcies happen all the time, not just for corporations but wealthy individuals (e.g. Donal trump). No shame just floating with the system. But for little people- it is everything. and we are creating a system that does not forget.
October 28, 2009 3:50 AM | Reply | Permalink
Sad thing is that it will be the extreme right that will take action. I do not see the left doing anything. They will bitch on blogs and complain to their therapists or something. Or get drunk and stay that way.
C
October 27, 2009 9:23 PM | Reply | Permalink
I suspect you're right. I agree.
Then I'm left wondering, "What does that mean, anyway?"
October 27, 2009 9:36 PM | Reply | Permalink
Very well stated and unfortunately correct.
October 27, 2009 10:03 PM | Reply | Permalink
Same passivity was noted during the Great Depression where there was certainly more widespread unemployment and agricultural anguish.
Does your theory cover both periods of time?
October 27, 2009 10:18 PM | Reply | Permalink
I don't see why not. Personal shame is powerful. But there was more outrage vented on the bankers back then- how ever many of them became poor also. So populist rage was somewhat blunted by the obvious failure of the entire system, there was a sense that we were all in it together (unlike today where the bankers flaunt it in your face).
But you just reminded me of something-About six months ago Ellen linked to some data on indebtedness levels throughout the depression. She argued the forced savings of WWII was what cleared the slate and then allowed for the prosperity after the war.
October 28, 2009 3:20 AM | Reply | Permalink
Bread and circuses baby.
October 27, 2009 11:26 PM | Reply | Permalink
Thomas Jefferson said, "Never spend money before you have earned it."
October 28, 2009 12:28 AM | Reply | Permalink
By that token only the rich should go to college.
And forget entrepreneurs with great ideas who need start up capital.
Jefferson wrote alot of things (for example see my quote on founders above). But yes debt is bad.
October 28, 2009 3:36 AM | Reply | Permalink
Most excellent Saladin! Inspired even.
One thing that crossed my mind is the rising number of folks who are walking away from the homes - and the mortgage. Homeowners Walking Away
Notice that the interpretation is "price for morality." Nothing is in the equation about predatory lenders or financial "wizards" who brought this disaster into being? Of course, those who walk away actually bear the consequences of their actions - unlike the folks who caused the problem.
On a different track, I think the coercive levers you bring up are magnified by the planned atomization of the last almost 30 years. Namely the destruction of community that has convinced folks they are all alone, what they do doesn't matter, and no one cares. It is a toxic mix. Personally, I think an engineered toxic mix.
October 28, 2009 1:25 AM | Reply | Permalink
Thanks Rowan,
I strongly agree about the atomization of our society, but there I think we are starting see a shift back towards community. Maybe it is wishful thinking but I see signs, and not just on the digital realm with social networking like FB.
October 28, 2009 2:13 PM | Reply | Permalink
Why do the new adults not believe they have a future? Maybe because they see "foreign" investors taking over everything. It's not like anyone in their right mind is going to say, "I think there is an opportunity in hardware, when The Home Depot and Lowe's own the market. Or a grocery store, since there is Safeway and Kroger's. Sandwiches? No, that's Quizno's and Subway. Pizza? That's Pizza Hut and Domino's, although I have a hard time calling that pizza having grown up in Upstate New York. Shoes? They have machines that make shoes.
Drive across the country and every town looks the same. There are corporate entities that have spread across the country and they are too big to fail!!! We, we are too little to succeed. There are but a few places left where one can create their own destiny.
It seems to me that if one is not convinced one can get ahead with investment, spend what you have because the work and regular paycheck was always going to be there ... then it wasn't.
Revolution? Not until the dollar menu disappears. It is hunger that leads to violence. Nothing short of hunger, unless one has an innate drive to violence. There will be no revolution in the US.
October 28, 2009 1:59 AM | Reply | Permalink
Revolution? Not until the dollar menu disappears. It is hunger that leads to violence. Nothing short of hunger,
I don't know if I completely agree. I do agree that Hunger motivates, but I also think that there is a moral persuasion argument that can also inspire. Maybe it is the Christian crusader strain to our culture but Andrew Goodman was not motivated to register blacks to vote by hunger. But for that sort of moral movement rather then hunger you need to start with a level of base comfort.
I think about Obama's election in light of the student loans he and michelle carried. If he did not write a best selling book capitalizing on his unique family history and position as first black editor of harvard law review he would not have paid off their debts. Do you think that michelle would have let him indulge his quixotic quest to become president if that had not happened. The answer is no.
So how many other potential young leaders have we handicapped with debt?
October 28, 2009 5:02 PM | Reply | Permalink
All of you are now on the list.
Beware.
October 28, 2009 3:34 AM | Reply | Permalink
That's okay, some of them are on our list too.
October 28, 2009 4:20 AM | Reply | Permalink
Some things, we can blame on ourselves; some things... not so much.
Suggested solution to both: Credit Card Confetti
http://tpmcafe.talkingpointsmemo.com/talk/blogs/kfreed/2009/10/credit-card-confetti-priceless.php
October 28, 2009 3:38 AM | Reply | Permalink
I would suggest the debt model is one derived by design and by manipulation of the overall financial structure of our society.
No matter from which direction you might view this structure there is present a reduction of the overall ability of our middle class to obtain and grow individual wealth. I submit this in not coincidental. The general theme of legislation and of the conduct of major employers for three decades or so has been financially disadvantageous if not disastrous to the middle class. The relationship between costs and wages has the first skyrocketing with the second increasing only nominally or remaining stagnant.
Most notable in this are the major expenditures of the average family. Healthcare costs, home purchase, financing college, energy and certain others termed as nonessentials but which are anything but that. These make up the bulk of expenditures and have increased in huge disproportion to incomes (wages). Thre is no mistaking this made credit borrowing the rule rather than the exception. And I would suggest this was the precise intent.
There is no escaping the trend analysis on this and there is no way our representaives in congres are unaware of it and knowingly did nothing to stem the rise of this imbalance.
It is my assertion that congress, major corporations and Wall Street are complicit in creating this imbalance. By intent. The numbers are right there in front us and they are absolutely due to a general formulation of policy devised to produce that outcome. This is all about numbers. There are no accidents with numbers.
October 28, 2009 4:11 AM | Reply | Permalink
I would suggest the debt model is one derived by design
I'd have to agree, and go a step further.
By investing the youth of any given generation into the status quo, you prevent most threats to it, by subverting the most likely change agents.
October 28, 2009 9:49 AM | Reply | Permalink
Hard to disagree with the logic or the social implications. The peer pressure to conform would definitely work in favor of the promoters of the subversive scheme. In as much as the herd mentality stifles independent thought or action the consensus rules by default. And is absent any critical examination of the rationale driving the process.
October 28, 2009 10:07 AM | Reply | Permalink
I am inclined to think that at least in the case of student loans, etc. it was by design. The republicans have clearly viewed academia with suspicion, and love to make fun of it. They have always hated them libural professors.
They made deals with myopic democrats that consistenly pushed student loans as a way to pay for school and as a way to force them into more productive fields, but also as a way to muzzle the left. If intentional it strikes me as a very smart strategy.
Some SL history here:
http://www.randomhistory.com/1-50/032loan.html
October 28, 2009 2:23 PM | Reply | Permalink
PTC, comment below. (student loans by design)
October 28, 2009 2:24 PM | Reply | Permalink
Saladin: You were looking for some populist outrage?
Well, I found some. Apparently the populist outrage can be located in Chicago:
http://www.huffingtonpost.com/tag/showdown-in-chicago
More: http://michaelmoore.com/
October 28, 2009 4:48 AM | Reply | Permalink
Saladin it is difficult to be outraged at the very people one wishes they were like and still believes that this can happen. It is the old American BS. Being told over and over the "Yes...you too can be a wheeler dealer. Just follow these simple rules. Take our new introductory course. Play our new lottery." and on and on. It is hard to hate your oppressor when you do not believe you are oppressed.
As George Carlin said. "It's called the American Dream because you have to be asleep to believe it." And unfortunately there are a lot of semi-comatose people in this country.
C
October 28, 2009 9:50 AM | Reply | Permalink
Well, they didn't call hope the last evil out of the box for nothing.
Hmm, just a question does C stand for Cynical? (sorta ribbing here)
But on the bright side, things are better then they once were. Through fits and starts we have progressed. People learn. Which is why we must persevere. We must repeatedly draw attention to the root causes, not just yell that people are dumb (why the Herbert article bothered me).
October 28, 2009 5:35 PM | Reply | Permalink
Very astute overall. Takes things a bit further than I usually think them through, in that I will say to myself 'people can't go out en masse and protest because they'll be fired' - the culture is different. But it's less that people will be fired, and more that you just can't lose your job.
And also, let's look at people who have 'taken to the streets' in large enough numbers to be successful at changing some kind of law or policy. 1) College kids in the 60s w/ Vietnam, who didn't have to worry about debt or being fired. And 2) African-Americans, most of whom were forcefully excluded from any kind of job where earnings were significant enough to worry over, marching for civil rights. Very big ideas, very easy to organize around.
With soooo much wrong with our society and culture today, there is really a challenge finding a single thing to unify around. It happened with this last election, but that election itself represented numerous issues and ideals too disparate to organize around. According to some, Americans who are dissatisfied, but not willing to sacrifice their jobs to 'take to the streets' shouting, well, something or other, are lazy and complicit in corruption.
This is a ridiculous, self-serving viewpoint for anyone in the media to take. Herbert does a lot of good work so he gets a kind of pass on this, but most reporters would rather blame the public for being misinformed than the misinformation that they personally help generate and disseminate (and none of them are taking to the streets, are they?) But why can't people afford to lose their jobs in the first place, fired for missing days for taking off to DC to attend protests? It's that universal, omnipresent debt. Everyone's in debt, you can't miss payments, you can't lose your job (especially in this economy), and protest as some kind of romanticized way of life is simply not possible for most everyone.
October 28, 2009 10:01 AM | Reply | Permalink
Also see my comments above.
C
October 28, 2009 10:12 AM | Reply | Permalink
This is because citizens don't have a comfortably conformist means to unify in a different way than we already have. We are supposedly unified vis-a-vis our equality of representation in congress. With congress fairly well broken by the oligarchs we are left on the outside looking in. We can't even rally around the flag because what it means to do so has been obfuscated.
October 28, 2009 10:21 AM | Reply | Permalink
Well except for those on the extreme right.
C
October 28, 2009 10:40 AM | Reply | Permalink
The word 'extreme' pretty well covers where the proposal goes wrong. We desperately need moderation. In more than a few things. I'll not be holding my breath though.
October 28, 2009 10:57 AM | Reply | Permalink
I hope you are right. But do not get in the way then as they "moderately" start taking pot shots at you.
C
October 28, 2009 11:13 AM | Reply | Permalink
I hear that. The key is we have seen extremism at work and already know it isn't such a hot idea. In war, in finance, in race relations; we've expeienced the entire gamut. When it gets to where the majority moderate population awakens and gets into it, all is lost.
October 28, 2009 1:08 PM | Reply | Permalink
Great addition to the ongoing TPM musings on the "Dude, where's my outrage?" issue. I think a few factors are at work
- the media manufactures a conviction in enough people that they are not part of the victimized masses, but rather the superior elite benefiting from the current social structure,
- the media continually underplays the degree of malfeasance in the financial sector,
- the media reinforces the banks' prefered narrative of the 'argument from necessity' in bailing out the financials, supporting bonuses, maintaining abusive practices in the interests of economic efficiency.
- Quinn's fine analogy with buffalo stampedes - the subliminal incremental signaling that leads to passivity in following the herd - the inscrutable manipulation of our 'bounded rationality'.
But I really think the personal responsibility ethos is at the core, as you say. More than any other country, the US has a culture of Autonomy - you are fully responsible for your outcomes. Explicit regulations or redistributive justice is seen as standing against Autonomy. So removing them is regarded as consistent with not only a morality of personal responsibility, but reinforcing the ultimate value of personal freedom. What it however leaves in place is all the implicit rules of the game: the right of the more powerful. And we live in a society where control of debt IS power. Our economy is governed by debt to an extent unlike any other (though Plato's oligarchical society pretty closely resembles it).
Debt-financing was regarded as the solution to every problem of inequality - Debt 'solved' the problem of access to education, lower-income housing, even - absurdly - the increasing income inequality itself (eg. notice how Mankiw and co tut-tutted the worries about inequality with their statistics about increasing lower-income households' spending). The elites personified the modern-day Marie Antoinette: "Let them eat debt".
As long as people continue to buy into this destructive duo of 'Autonomy ethics' and 'social regulation through debt', it's going to be hard to turn things around. The banks hold the reins and the People will yoke themselves to their carriage like domesticated buffalo...
Sorry if these ramblings don't make much sense, it's some thoughts I've been trying to collect for awhile, but haven't been able to work up into a coherent blog.
Great blog, bringing alot of strands together.
October 28, 2009 10:13 AM | Reply | Permalink
In my mind, "Debt" is the "Future." Which makes it really interesting the way the US/Canada went so hog wild with debt. The future was always gonna be brighter, always the place where things would get solved. So solving problems through debt was no different than shoving them out to the future.
We just swapped a bad word for a good one.
But what happens to America when the future not only gets mortgaged, but then... the mortgage crashes. Do you see ANY chance the American people will accept the loss of economic progress for a generation while the bad debt is paid off?
I see none.
So the options come down to a range of shell games, cons and lies put together by the political and financial leadership (which we're seeing now)... or projected resentments, scapegoats, internal and external enemies as mobilized by the politicians (likely of the Right, and destined not to work too well over time)... or a plain and simple attempt to walkaway, impatience with it all, hands thrown in the air, a fuck you tossed on the lender's desk, and some form of the whole country attempting to move West and start again. Or North, I donno.
But absorb a 10% hit to pay off the various forms of debt already piled up, and sustain those payments for decades, with no obvious signals coming in that things are or will get better?
NFW.
October 28, 2009 1:06 PM | Reply | Permalink
I'm no good at this Big Picture stuff, Q. I personally don't see the 'walk away' option as viable. one way or another, it's going to hurt. And the way they're printing money and handing it to the rich (by inflating assets, rather than wages), the probable outcome is a smaller 'American Pie' with the rich having a bigger chunk of it, while China does horrible things to it with its intimate parts...
October 28, 2009 1:54 PM | Reply | Permalink
All of which, (this blog, most of the comments, and especially these last three comments), begs the question of expanding populations, which call for expanded monetary supply, which in turn depends on the existence of interest to create wealth. Not that anybody created our system individually, but something in my mind keeps harking back to Bretton-Woods, its' ultimate demise, and the pegged currencies exporting capital to the core, US, (us). It's deep stuff and reforming it is going to be hard because almost nobody understands any of it. In fact, I'm just guessing here.
October 28, 2009 2:15 PM | Reply | Permalink
Now you're way over my head. Bretton Woods II never made much sense to me - having one central reserve currency and all that. Everyone's larded up with dollars because (i) they got sick of getting screwed by US banks everytime an asset-bubble collapsed, and (ii) they liked exporting useless crap to stupid Americans. But what do I know...
But, is that a new hairdo and boots, or have I not been paying attention...?
October 28, 2009 2:26 PM | Reply | Permalink
Like I said, I'm just guessing or making it up, but yeah, let's get down to the important stuff, like fashion and style. We can at least understand or minimally have an opinion on that. Plus it helps grow the economy. ;)
October 28, 2009 2:36 PM | Reply | Permalink
With a get up like that what u talking about reform for? Bretton Woods? Seriously smash something.
October 28, 2009 2:41 PM | Reply | Permalink
I'm no good at this Big Picture stuff, Q. I personally don't see the 'walk away' option as viable. one way or another, it's going to hurt. And the way they're printing money and handing it to the rich (by inflating assets, rather than wages), the probable outcome is a smaller 'American Pie' with the rich having an even bigger chunk of it, while China does horrible things to it with its intimate parts...
October 28, 2009 1:55 PM | Reply | Permalink
No rambling:
I think that very succinctly sums it up.
October 28, 2009 2:48 PM | Reply | Permalink
see my comments here:
http://notesfromtherustbelt.blogspot.com/2009/10/were-all-slaves-now.html
October 28, 2009 10:25 AM | Reply | Permalink
Or just post them here. It's easier.
October 28, 2009 12:20 PM | Reply | Permalink
it goes far deeper then your conclusion.
in fact i doubt few people believe its their fault.
its about media manipulation and finding scape goats( minorities for ex.) and commercials and dumb people and fox talking heads and well you get the point.
October 28, 2009 11:44 AM | Reply | Permalink
I tried leaving a comment here and apparently it got blocked - I assume because of the other links in the comments. I just tried again, so we'll see...
October 28, 2009 2:17 PM | Reply | Permalink
jonrey.
TPM has a two link maximum comment policy - so try breaking them up.
October 28, 2009 2:25 PM | Reply | Permalink