Monday, August 4, 2014

One-third of a nation preyed upon by debt collectors, and one-third of their wealth vaporized

 ("One-Third of a Nation" was a WPA theatre play about poor housing conditions for low-income Americans. WPA poster, courtesy of the Library of Congress Prints and Photographs Division.)

Here are two interesting findings from recent research:

1. "More than 35 percent of Americans have debts and unpaid bills that have been reported to collection agencies, according to a study released Tuesday by the Urban Institute...The Urban Institute's (Caroline) Ratcliffe said that stagnant incomes are key to why some parts of the country are struggling to repay their debt." (See "Americans in Debt," July 29, 2014)

2. Recent research from the Russell Sage Foundation indicates that ordinary Americans lost at least a third of their wealth between the years 2003 and 2013. (See "Wealth Levels, Wealth Inequality, and the Great Recession" and "What Recovery? You Probably Became Poorer In the Last 10 Years")

The big American financial institutions that engaged in massive and wide-scale civil & criminal wrongdoing got bailed out by the government in the early years of the recession. But for Americans who were laid off through no fault of their own (indeed, they were laid off because of the corporate massacre of the economy) there was, and is, no such bailout. Quite the contrary, the federal government is standing idly by while Corporate America sends the debt collection vultures to feed upon the financial carcasses of broke Americans. To make matters worse, in 2005 the federal government actually made it harder for people to declare bankruptcy, thus allowing Corporate America to scrape even more money off devastated Americans (see "Too broke to go bankrupt").

You would think, as a matter of basic fairness, that if Congress gives hundreds of  billions of dollars to banks, to bail them out from their own misdeeds, that it would also consider backtracking the 2005 bankruptcy reform law, so that American citizens harmed by the banks' misdeeds could get some relief. Did our congressional "leaders" do that? Nope. And that's probably because they know that they can't get campaign cash from people going through bankruptcy, but they can get it from the big banks. Indeed, the bank bailout money was a cash investment in their own political careers. 

So, let's sum this up: People who engaged in crime & fraud got bailed out. People who were hurt by that crime & fraud are getting punished. That's like giving a reward to a person who robs a house, and then throwing the homeowners in jail. And that's what plutocracy does. It turns justice upside-down. White collar crooks and greedy sociopaths give millions to political candidates, who will then pervert justice once they're elected. This is why, for example, 22,000 wealthy Americans can engage in illegal tax evasion and the government agrees to keep their names secret (see "Big Credit Suisse’s Sweetheart Deal" and "SEC Goldman Lawyer Says Agency Too Timid on Wall Street Misdeeds"). And this is why, for example, right-wing politicians in Kansas--home of the Koch brothers--can lower tax rates for rich families, and raise tax rates on low-income families (see, e.g., "How Tea Party tax cuts are turning Kansas into a smoking ruin," where journalist/author Michael Hiltzik correctly reports that legislative "changes will cut the taxes of the wealthiest 1% of Kansans by 2.2% (but) The poorest 20% of Kansans will see their taxes rise by 1.3%.").

Billionaire investor Warren Buffet famously said, "There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning." And, unfortunately, as long as millions of Americans continue to vote for political candidates who are funded by the big banks, like George Bush, Mitt Romney, and Hillary Clinton, and as long as we have leaders who tread lightly around Corporate America, like President Obama, the rich class will continue to engage in war against us, and continue to win.

Hopefully, in the not-too-distant future, we will decide that corporate greed, corruption, and crime is unacceptable, and opt instead for a new and stronger New Deal.

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