The Long View 2005-03-08: Very Bad Things

I hadn't remembered this term, but John brings up 'debt strikes' here. This is apparently a thing, but it is a thing that hasn't quite caught on yet. John is right that this would have bad consequences on the financial system if it ever got really popular. Any debt strike bad enough to really hurt the financial system would hurt everyone else too. There isn't a lot of difference between what happened in the housing crash in 2008 and the likely effect of a debt strike on mortgages, for example. I suppose in theory you could use the resumption of payments as leverage, but even with the Internet that would be hard to coordinate on a mass scale. Right now, the ability of the Internet to foster discontent is limited to small groups of enthusiasts.


Very Bad Things

 

Once upon at time, college students majored in English literature if they were not pursuing a career in medicine or engineering or science. Then it was history. I myself majored in political science. I had long supposed that, eventually, nothing would be left of the curriculum but courses related to business or science degrees.

Once again I find that I am out of touch, if we can believe this piece by Elizabeth van Ness in the New York TimesIs a Cinema Studies Degree the New M.B.A.?. This new make-weight degree seems to differ from its predecessors in that the people who pursue it take it dead seriously:

"People endowed with social power and prestige are able to use film and media images to reinforce their power - we need to look to film to grant power to those who are marginalized or currently not represented," said [a student], who envisions a future in the public policy arena. The communal nature of film, he said, has a distinct power to affect large groups, and he expects to use his cinematic skills to do exactly that.

Look, if your undergraduate or graduate degree will give you the power to cloud men's minds, that's just wonderful. However, please have the grace to employ these dark arts for your own selfish purposes. You at least have some idea what you want, and you can tell when you are satisfied. If you try to do this kind of thing for what you imagine other people want or need, then neither you nor the victims of your benevolence are going to be happy.

* * *

In addition to a political science degree, I also have a law degree, a qualification of which stories like this make me deeply ashamed:

VIENNA (Reuters) - U.S. and Austrian lawyers have filed a lawsuit demanding Thailand, U.S. forecasters and the French Accor group answer accusations they failed in a duty to warn populations hit by December's Tsunami disaster, a lawyer said Monday. ...The lawsuit was filed Friday at a New York district court on behalf of tsunami victims by lawyers including U.S. attorney Edward Fagan, internationally renowned for 1990s lawsuits against Swiss banks over Holocaust-era accounts. It demanded an account of their actions on Dec. 26.

Anyone interested in the suit can pursue the matter here, in German and English.

Lovecraft did not have enough words for "reptilian" in his vocabulary to express what I think of this use of the courts.

* * *

Moving on from litigation, we come to legislation. In particular, we move on to the blood-sucking bankruptcy-reform bill now before the United States Senate. Newsday put it like this:

In the name of ending bankruptcy abuse, the bill would impose a means test to determine who could have their debts wiped out and who could only have them adjusted with a repayment schedule. It would do nothing to rein in companies that flood consumers with credit, high interest rates and long, costly repayment schedules. And in their zeal to pass a bill the House will accept without changes, Senate Republicans rejected Democratic amendments intended to take the focus off income and to take aim instead at willful deadbeats.

Earlier versions of this bill have failed of passage, chiefly because insanity attracts insanity. This latest version may actually fail today, because Senator Schumer of New York plans to introduce an amendment that would exclude prolife activists from any bankruptcy protection, if they have been loaded with civil penalties for demonstrating at abortion clinics. Such an amendment would be a poison pill: the House would not pass the bill if the prolife exclusion were added. However, it is possible that the amendment will fail, and the bill will pass both houses.

What would the significance of that be? Quoting Paul Krugman of the New York Times just encourages him, but in this case, he is almost right:

Warren Buffett recently made headlines by saying America is more likely to turn into a "sharecroppers' society" than an "ownership society." But I think the right term is a "debt peonage" society - after the system, prevalent in the post-Civil War South, in which debtors were forced to work for their creditors. The bankruptcy bill won't get us back to those bad old days all by itself, but it's a significant step in that direction.

The "almost" here is that peonage is not an option in America. Debt strikes are, however. That's what the bankruptcy laws were originally enacted to avoid. If that safety valve closes, the Internet will make collective debtor resistance easier to organize than it has ever been. The mere whiff of this will threaten the financial system from a wholly unexpected direction. Watch.

* * *

And then, in the frozen Ninth Circle of Hell, we find the Spengler at Asia Times. In a column entitled They made a democracy and called it peace, he explains that the Middle East would not long survive the success of the Bush Administration's universal democracy strategy. Consider World War II:

That victory by the United States replaced German, Japanese and Russian tyranny with democracies is not in doubt. The problem is: where are the Germans, Japanese and Russians? If the United States had set out to exterminate its erstwhile enemies, it could not have done a more thorough job. ...In any case, the former Axis powers and the former Soviet Union and its satellites occupy every one of the top positions on the death row of demographics. I refer to the United Nations' report "World Population Prospects: The 2004 Revision"...None of this would have surprised the Nazis, who believed with paranoid fervor that Germany's national existence was in danger. One can hear the shade of Adolf Hitler saying, "You see, that is just what I anticipated and wanted to avoid! I warned the Germans that their national existence was in danger, and now you see that decadent democracy has finished us off."

Understand that the column is in no way a pro-fascist argument; Spengler is just suggesting that the Kantian Peace may turn out to be the peace of death.

This hypothesis needs work. The UK was on the winning side in World War II, but its demographics are not so different those of Continental Europe. Actually, the same is true of Massachusetts in the United States. The depopulation of Russia began before the end of the Soviet Union. Elsewhere in the world, China seems headed for a demographic crisis of its own; so are parts of India, believe it or not.

I am quite willing to believe that civilizations can die of despair, but a great deal else is happening, too.

Copyright © 2005 by John J. Reilly

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