What's Next, Debtors' Prisons?
Disclaimer: I'm not sure how Rusty feels about this issue, and for all I know we're diametrically opposed... so just make sure this post isn't attributed to him. I should also note that I'm not exactly a "liberal pushover." I believe, wholeheartedly, in the "ownership society." That said:
I'm sorry, but there's just something obscene about the way this Bankruptcy Bill is sailing to passage, without even token opposition from anyone. It seems almost self-evident to me that if it's such a walk in the park to file bankruptcy under current statute then the appropriate reaction from a responsible credit industry would be to... lend less, or at least cut the predatory lending, deception, etc.. That being the case, there's simply no way to interpret the desire to make bankruptcy as painful as having the skin stripped off your back by a cat-o-nine-tails (instead of just losing a hand or something), unless it's an over-arching GRUNCH (what R. Buckminster Fuller used to call the "Great Universal Cash Heist.") Gosh, you'd think that'd be a Democrat issue, right? I mean them being the guardians of the poor and disadvantaged and all.
We know how that worked out, for Iraq and the Middle East.
A few years ago I wrote a dissertation on the influence of money in elections, concluding that it was about as important as ideology or incumbency, which is fine with me frankly. I'm not a purist. But this is something else. This is rather clearly a case where an industry has both bought and sold a congress... to the detriment not only of most of the middle class, but quite possibly the country itself. And nary a soul to stand and raise their voice against the invisible tide. Not even those bastions of progressive activism on behalf of the downtrodden: Kennedy and Byrd. You'd think Democrats weren't really progressive any more, or something.
Is there no shame? None at all? Yes, I know we're "new conservatives," but this smells like something that's been under an ancient Danish dock since before the Great War. Glenn Reynolds is willing to say so, while he posts a challenge to the blogosphere from Jim Bennet:
It has occured to me that the bankruptcy bill (which I detest for the same reasons that you have mentioned) would be an interesting test of blogospheric power. Here's a situation where the Democrats are planning to make a major issue out of Bolton's appointment to the UN -- where his crime is merely speaking out loud what most Americans already feel about that place -- while rolling over to the corporate lobby on something most Americans would want some opposition to. If the blogosphere could mount an effective campaign for people to write to their senators, it would mark its emergence as a genuinely independent force in US politics.
Is it too late? Let's post the names of some of the honorable legislators in the odorous back pockets of the credit card industry, starting with Jim Moran (VA) and Hillary Clinton (NY). But the mugging continues...
As Louis O. Kelso, the inventor of the ESOP said once: "every step that concentrates ownership and control of capital is a disguised leap toward socialism." This is an evil bill. Yes, evil. And if bribery weren't implicated in the bum's rush to get it by, it wouldn't even be on the agenda.
Update: Armed Liberal is on the same soapbox (and has been for some time). He says calls are better than emails.
(Cross-posted by Demosophist to Demosophia and Anticipatory Retaliation)
Posted by: Demosophist at
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No one forces someone to get a credit card, or to over spend after getting it (you call the interest rate terms "misleading", but I don't think anyone is confused by the fact that the money has to be repaid).
Next thing you know you will blame McDonalds for making Americans fat. They make their food cheap, advertise it excessively. Let's make everything someone else's fault!
Posted by: whatever at March 09, 2005 08:13 PM (Urdua)
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Perhaps you should take the time to actually read this new law you are against:
- People who make less than the median income in their state are excempted
- People filing for bankrupcy due to medical expenses, divorce, or military service are exempted
The new law essentially applies means testing (i.e. what is your income) to see if you can actually repay your debts. Is this bad?
I am no fan of credit card companies, but according to the WSJ they make up 20% of bankrupcy debt. The rest are small business and the like.
So do some more research and explain why it is bad instead of just making a kneejerk reaction.
Posted by: Director Mitch at March 09, 2005 08:58 PM (Urdua)
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- People filing for bankrupcy due to medical expenses, divorce, or military service are exempted
That's not true. Durbin, Kennedy and Feingold proposed those amendments and
none of them passed.
Pherhaps you should do some reading too.
Posted by: Mike at March 10, 2005 10:27 AM (ELnLC)
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Perhaps you should take the time to actually read this new law you are against:
The exemptions are certainly useful (except that all but one were voted down in amendment) but my basic problem is that the credit card industry is the prime mover for this legislation, and I've watched their ramp-up of predatory lending since the sixties. This is the logical next step in what amounts to bad public policy. As Glenn Reynolds says, if borrowers have to reap the consequences of their bad decisions (in the form of seven years of no credit at the very least) why do lenders figure they should be exempted from consequences they knew about when they extended credit? Sorry, but this dips into the some trough as corporate welfare. It is not libertarian, or even public choice, oriented. It's blatant manipulation of and by the state.
No one forces someone to get a credit card, or to over spend after getting it .... Next thing you know you will blame McDonalds for making Americans fat.
Again, the argument applies just as well to debtors' prisons. I mean, they deserve it because they didn't read the fine print, right? Of course, most people would need a magnifying glass to discover that credit card companies are empowered to extort userous interest rates should people fall behind on a payment or two... but it's in writing and devil take the hindmost, etc.
There was a reason why the levitical law imposed a "judilee year" and it had to do with the extraordinarily corrosive impact of debt on the society, and the relative innocuity of forgiving debts that had been contrived on bad grounds. The bottom line here, as Glenn also points out, is that this law will raise the number of suicides and murders... which I guess is a small price if you happen to be in the credit card business. The ultimate irony, of course, is that this takes place in a context where the people sitting on these corparate boards know full well that at some point the national debts that they've underwritten will be repudiated. They're just milking the system for all its worth, before that happens.
But this bill is actually enough for me to reconsider my decision to leave the democrats, or to vote consistently Republican. It adheres to the stereotypical view of Republicans as willing to jettison the public good if there's some Scrooge-like profit in doing so. And believe me, I'm not going to enjoy the political repurcussions of this, because I was sort of looking forward to this "ownership society" thing.
Fat freakin' chance. Apparently it's just a lot of hot air.
Posted by: Demosophist at March 10, 2005 02:22 PM (Dfdj0)
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Demosophist: Your concerns are mine. I have been the victim of bankruptcy many times. It did need to be tightened up. Borrowing money to finance a new swimming pool and then filing for bankrupcy 60 days later is a farce that needed fixing. However, as bad as the bankruptcy laws are, they are needed. My company included a percentage of bankruptcies in our profit structure. That added we never really got beat to bad. Young people make mistakes. They over borrow because credit companies are greedy. They offer credit to easily. Young people that are victims of salesmen and credit companies working together should not have their lives ruined because of a few mistakes. This new law scarces me. Doesn't affect me but scares me. Everyone sometimes needs a way out. A fresh start. They need room to gather themselves for another crack at the future. We shouldn't remove this option.
Posted by: greyrooster at March 11, 2005 08:41 PM (CBNGy)
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The exclusions are there to be accepted or rejected by the bankrupcy judge. The filer has to show that the bankrupcy is due to an "unusual circumstance", which can include divorce, medical, etc.
And for the fine print on credit cards? I don't care what they say, but no one forces people to go out and spend more than they can pay back every month. If you think people need to be protected from themselves and taken care of by the government, then by all means go vote democratic. They will put you in a nice tight cacoon and protect you from all your actions.
Increase suicides and murders? Give me a break, you are sounding no better than the wingbats who predicted all the nasty things before the Iraq war that didn't happen because you can't make your argument otherwise (maybe you can add that it will cause hemoroids?)
This law makes bankrupcy harder, it doesn't outlaw it. Like abortion, bankrupcy should be legal, but difficult to obtain. If it's a little harder, then maybe people will think about their actions a little more.
Posted by: whatever at March 14, 2005 10:48 PM (Urdua)
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Sorry, but someone is messing around with the comment submission protocols so that forbidden words embedded in other words result in a submission error. Hence, I can't spell the fruit of the vine, g@ape because it contains the forbidden word @ape, and can't correctly spell the word "sozialism" because it contains the forbidden word zialis.
Posted by: Demosophist at March 15, 2005 04:42 AM (Dfdj0)
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