Stoller: A Debtcropper Society

[girl gone mad]

http://www.nakedcapitalism.com/2010/11/stoller-a-debtcropper-society-2.html">A Debtcropper Society

By Matt Stoller, a blogger-turned Congressional staffer. He was a policy advisor to Rep. Alan Grayson on financial policy issues. Cross posted from New Deal 2.0.

A lot of people forget that having debt you can’t pay back really sucks. Debt is not just a credit instrument, it is an instrument of political and economic control.

It’s actually baked into our culture. The phrase ‘the man’, as in ‘fight the man’, referred originally to creditors. ‘The man’ in the 19th century stood for ‘furnishing man’, the merchant that sold 19th century sharecroppers and Southern farmers their supplies for the year, usually on credit. Farmers, often illiterate and certainly unable to understand the arrangements into which they were entering, were charged interest rates of 80-100 percent a year, with a lien places on their crops. When approaching a furnishing agent, who could grant them credit for seeds, equipment, even food itself, a farmer would meekly look down nervously as his debts were marked down in a notebook. At the end of a year, due to deflation and usury, farmers usually owed more than they started the year owing. Their land was often forfeit, and eventually most of them became tenant farmers.

They were in hock to the man, and eventually became slaves to him. This structure, of sharecropping and usury, held together by political violence, continued into the 1960s in some areas of the South. As late as the 1960s, Kennedy would see rural poverty in Arkansas and pronounce it ’shocking’. These were the fruits of usury, a society built on unsustainable debt peonage.

Today, we are in the midst of creating a second sharecropper society. I first heard the term “slaves to the bank” from a constituent fighting a fraudulent foreclosure. The details aren’t so important — this couple had been illegally placed in a predatory loan — but at one point, the wife explained that she and her husband were so scared they would have “given their first born to the bank to keep their home”. That was fear speaking, total unadulterated panic. And as we watch debt-holders use the ornaments of fear, such a loan sharking company that set up fake courts to convince debtors they were losing cases, we should recognize that what the creditor class wants is what they’ve always wanted: total dominance of our culture.

Today, the debts do not involve liens against crops. People in modern America carry student loans, credit card debt, and mortgages. All of these are hard to pay back, often bringing with them impenetrable contracts and illegal fees. Credit card debt is difficult to discharge in bankruptcy and a default on a home loan can leave you homeless. A student loan debt is literally a claim against a life — you cannot discharge it in bankruptcy, and if you die, your parents are obligated to pay it. If the banks have their way, mortgages and deficiency judgments will follow you around forever, as they do in Spain.

http://www.nakedcapitalism.com/2010/11/stoller-a-debtcropper-society-2.html">more...

[sarcasmo]

1. 27.5 percent 28.99 percent credit cards is loan sharking. We have become debt slaves.

Pay cash if you can and before you buy something ask yourself if you can live with out that item.

[billlll]

2. farm rent 20 years in advance, demanded by the owners, China about1930

PS. Aside.... we need to reform our bankruptcy law.

[knitter4democracy]

3. I'm in debt I'm not sure how I can pay off.

I owe about $20K in legal debt to two different lawyers to help keep my kids and me safe from my crazy ex. I've got full legal and physical custody (for now--he's already said he'll fight until the youngest is 18, while on the stand, mind you), and my kids are safer for it, so that's good, but I have no idea how I'm going to pay off all this debt any time soon.

Add in medical debt from bills the ex has refused to pay and the state gave him five years to pay off, and, well, it's a long road.

[jtuck004]

4. We can fight back, informed by our history...

These last few paragraphs are from Farber's work toward consciousness-raising for students. Replace the word student with "debtor". He is telling any subjugated class that there is a successful example out there for tapping unused political power. People can quit acting as powerless individuals, can organize and educate themseves, can tap a vast amount of unused power which is there for the taking.

It ain't easy. People of color still suffer from racism, and it is questionable as to whether students, with their kowtowing to university structures and taking on debt that will ruin them have freed themselves from the shackles described by Farber. And in the apparently divisive times we have I am sure it is hard for people to see their real opponents.

But just because it's hard doesn't mean we shouldn't try.

...

How do you raise hell? That's a whole other article. But just for a start, why not stay with the analogy? What have black people done? They have, first of all, faced the fact of their slavery. They've stopped kidding themselves about an eventual reward in that Great Watermelon Patch in the sky. They've organized; they're decided to get freedom now, and they've started taking it.

Students, like black people, have immense unused power. They could, theoretically, insist on participating in their own education. They could make academic freedom bilateral. They could teach their teachers to thrive on love and admiration, rather than fear and respect, and to lay down their weapons. Students could discover community. And they could learn to dance by dancing on the IBM cards. They could make coloring books out of the catalogs and they could put the grading system in a museum. They could raze one set of walls and let life come blowing into the classroom. They could raze another set of walls and let education flow out and flood the streets. They could turn the classroom into where it's at -- a "field of action" as Peter Marin describes it. And believe it or not, they could study eagerly and learn prodigiously for the best of all possible reasons -- their own reasons.

They could. Theoretically. They have the power. But only in a very few places, like Berkeley, have they even begun to think about using it. For students, as for black people, the hardest battle isn't with Mr. Charlie, It's with what Mr Charlie has done to your mind.