Banking Industry Purchases Bankruptcy Reform Bill
If you haven't already heard, the U.S. Senate has voted in favor of bankruptcy "reform" legislation that was written by U.S. banks, credit card companies, and automakers. The bill, which the financial industries have tried to quietly sneak past The People ever since the Monica Lewinsky diversion, is finally about to get what they paid for from the Republican Congress. And the American People are about to effectively lose one of their most crucial rights as the very same elected officials who irresponsbily ignore our mutli-trillion dollar national debt sentence average Americans to the American Debtors Prison for failing to repay as little as a few thousand dollars on creditors' schedules.
The news media, as usual, has provided only the most superficial reporting on the matter. Headlines such as "Bankruptcy May Become More Difficult" imply that the new law is only a possibility rather than a bought-and-paid-for certainty, in the absence of public outrage that will never exist without substantial reporting on the matter. And throughout this insufficient reporting, journalists continue to quote tired, rhetorical slogans that prove precisely nothing, but imply a great deal about the characters of anyone who files for bankruptcy (e.g., "too many people abuse the bankrupcty system"). Notably absent from this reporting are stories of corporate CEO's who personally made millions of dollars by leading their companies into bankruptcy--a very real and common abuse of the bankruptcy system that is not even addressed by the legislation under consideration.
Exactly how does an individual American citizen "abuse" the bankruptcy system, or somehow come out ahead by filing for bankruptcy? That is like absusing fire on a freezing cold night by burning your house down to keep warm. Filing for bankruptcy is a devastating decision financially, emotionally and even physically. There is nothing easy about bankruptcy, especially since the advent of the American Debtors Prison. In fact, bankruptcy all too often becomes a one-way ticket to the American Debtors Prison now that computer databases have made the "clean slate" an impossibility. Bankruptcy is the very last resort for most people.
Do some people go on major shopping sprees, then immediately file for bankruptcy when they find themselves overwhelmed by debt? Of course they do. Do most people who file for bankruptcy fall into this category? Of course not. A nation with debt collectors who have been known tell children to write "my parents are deadbeats" on the wall with lipstick is a nation that does indeed have some truly sick, irresponsible people in it. But even I do not call for an end to the debt collections industry just because that industry tends to attract more lowlifes than, say, non-profit homeless advocacy. Instead, I call for criminal and civil prosecution of those individual debt collectors who take advantage of their legal capacity to terrorize others. It is a terrible thing when we punish all debtors because a relative few take advantage of a system that is designed to protect everyone, especially when those few "deadbeats" are destroying their own financial futures in the process, and legislators are dismantling the system for an entirely different reason to begin with--to please the corporate campaign contributors.
You may learn more about this bill at the Talking Points Memo special blog on the subject. But you'll probably learn more about it even more quickly by viewing The Onion's unique approach because this bill is tailor-made for humor, if it weren't such a serious threat. I would also recommend reading Senator Edward Kennedy's final statement to the Senate on this subject.
The gist of the bill is this: debtors who wish to file for bankruptcy will be required to pass a "means test" in order to file for Chapter 7 liquidation bankruptcy. Those who do not pass this test will be forced into Chapter 13 bankruptcy on a six-year repayment plan instead. In case it isn't already obvious, let me clearly state what is wrong with this:
1. Those who truly need a Chapter 7 liquidation bankruptcy the most, by definition, are too poor to afford the exhorbitant legal costs associated with presenting an adequate case for the "means test".
2. Forcing anyone to work for six years violates the 13th Amendement prohibition against involuntary servitude for non-criminal offenses. A six-year repayment plan forces debtors to work for wages that go to creditors instead, and the failure to repay a debt is a civil, not a criminal offense.
3. The bill essentially removes all risk from irresponsible lending, which can only lead to greater occurence of irresponsible lending, and therefore increased need need for bankruptcy--the exact same phenomenon we've witnessed in recent decades as predatory lending practices led to a dramatic rise in personal bankruptcies.
4. When our Founders mandated in the U.S. Constitution that Congress establish a uniform bankruptcy code, they did not mention a "means test". The first purpose of bankruptcy is to protect citizens from creditor harassment and terror, and then to provide for a "clean slate" from which any citizen may rise again and contribute meaningfully to the strength of our nation, rather than being forced into slavery, which can only degrade us all. Bankruptcy has the further benefit of encouraging lenders to be very careful who they allow to borrow money from them, because bankruptcy introduces risk for lenders.
As I try to discuss this legislation with other people--even intelligent people--the conservative slogan "Too many people abuse the system" spews from their mouths like banking industry "campaign contributions" (*wink*) flowing into Capitol Hill. This statement is absolutely false, and the fact that so many people repeat it anyway only indicates how easy it is to manipulate millions of peoples' fundamental beliefs when you have control of the mass media. The truth about this legislation is out there, if anyone cares to look for it. Even members of Congress themselves admit that this horrible legislation was written by financial corporations, not by those legislators whom The People elected to Congress. Does it really take only simple-minded slogans to turn Americans into simple-minded people who passively support the erosion of their own foundation of freedom? Activists have been fighting against this bankruptcy "reform" legislation for years, and until now they have succeeded--by refusing to allow the financial industries to purchase votes quietly, without the public learning about it. They have my deepest admiration for their hard work and accomplishment in this. However, with recent Senate passage these activists have all but given up, and I'm saddened to see them resign to the idea that this will indeed become law even before it is voted on in the House of Representatives.
We cannot stop this fight now. It is too important. Activists need to accept the fact that sometimes the bad guys win, because bad guys are ruthless and don't obey the rules. But even though President Bush plans to sign this bill into law, it must first pass the House of Representatives, and therein lies our opportunity. We need to Speak Up--and LOUDLY--to everyone who will hear. We need to educate and inform the American People of what is going on at Capitol Hill. We need to encourage not thousands, but millions of Americans to call, write and email their U.S. Representatives and order them to REPRESENT the American People, not the credit card companies. We need to realize that freedom and opportunity in a capitalist society begins with personal financial security, and to commit ourselves to voting entirely on the basis of candidates' records with respect to protecting our citizen's personal finances. We need to inundate every form of news media in America with requets that they give this story the high priority it deserves, and forget about Michael Jackson for a while. There is still much we can do to stop this bill from passing, and we are all guilty of poor citizenship if we fail to try right up until the moment President Bush signs away the American Peoples' life savings to pay for this bill Visa and Mastercard bill.
The news media, as usual, has provided only the most superficial reporting on the matter. Headlines such as "Bankruptcy May Become More Difficult" imply that the new law is only a possibility rather than a bought-and-paid-for certainty, in the absence of public outrage that will never exist without substantial reporting on the matter. And throughout this insufficient reporting, journalists continue to quote tired, rhetorical slogans that prove precisely nothing, but imply a great deal about the characters of anyone who files for bankruptcy (e.g., "too many people abuse the bankrupcty system"). Notably absent from this reporting are stories of corporate CEO's who personally made millions of dollars by leading their companies into bankruptcy--a very real and common abuse of the bankruptcy system that is not even addressed by the legislation under consideration.
Exactly how does an individual American citizen "abuse" the bankruptcy system, or somehow come out ahead by filing for bankruptcy? That is like absusing fire on a freezing cold night by burning your house down to keep warm. Filing for bankruptcy is a devastating decision financially, emotionally and even physically. There is nothing easy about bankruptcy, especially since the advent of the American Debtors Prison. In fact, bankruptcy all too often becomes a one-way ticket to the American Debtors Prison now that computer databases have made the "clean slate" an impossibility. Bankruptcy is the very last resort for most people.
Do some people go on major shopping sprees, then immediately file for bankruptcy when they find themselves overwhelmed by debt? Of course they do. Do most people who file for bankruptcy fall into this category? Of course not. A nation with debt collectors who have been known tell children to write "my parents are deadbeats" on the wall with lipstick is a nation that does indeed have some truly sick, irresponsible people in it. But even I do not call for an end to the debt collections industry just because that industry tends to attract more lowlifes than, say, non-profit homeless advocacy. Instead, I call for criminal and civil prosecution of those individual debt collectors who take advantage of their legal capacity to terrorize others. It is a terrible thing when we punish all debtors because a relative few take advantage of a system that is designed to protect everyone, especially when those few "deadbeats" are destroying their own financial futures in the process, and legislators are dismantling the system for an entirely different reason to begin with--to please the corporate campaign contributors.
You may learn more about this bill at the Talking Points Memo special blog on the subject. But you'll probably learn more about it even more quickly by viewing The Onion's unique approach because this bill is tailor-made for humor, if it weren't such a serious threat. I would also recommend reading Senator Edward Kennedy's final statement to the Senate on this subject.
The gist of the bill is this: debtors who wish to file for bankruptcy will be required to pass a "means test" in order to file for Chapter 7 liquidation bankruptcy. Those who do not pass this test will be forced into Chapter 13 bankruptcy on a six-year repayment plan instead. In case it isn't already obvious, let me clearly state what is wrong with this:
1. Those who truly need a Chapter 7 liquidation bankruptcy the most, by definition, are too poor to afford the exhorbitant legal costs associated with presenting an adequate case for the "means test".
2. Forcing anyone to work for six years violates the 13th Amendement prohibition against involuntary servitude for non-criminal offenses. A six-year repayment plan forces debtors to work for wages that go to creditors instead, and the failure to repay a debt is a civil, not a criminal offense.
3. The bill essentially removes all risk from irresponsible lending, which can only lead to greater occurence of irresponsible lending, and therefore increased need need for bankruptcy--the exact same phenomenon we've witnessed in recent decades as predatory lending practices led to a dramatic rise in personal bankruptcies.
4. When our Founders mandated in the U.S. Constitution that Congress establish a uniform bankruptcy code, they did not mention a "means test". The first purpose of bankruptcy is to protect citizens from creditor harassment and terror, and then to provide for a "clean slate" from which any citizen may rise again and contribute meaningfully to the strength of our nation, rather than being forced into slavery, which can only degrade us all. Bankruptcy has the further benefit of encouraging lenders to be very careful who they allow to borrow money from them, because bankruptcy introduces risk for lenders.
As I try to discuss this legislation with other people--even intelligent people--the conservative slogan "Too many people abuse the system" spews from their mouths like banking industry "campaign contributions" (*wink*) flowing into Capitol Hill. This statement is absolutely false, and the fact that so many people repeat it anyway only indicates how easy it is to manipulate millions of peoples' fundamental beliefs when you have control of the mass media. The truth about this legislation is out there, if anyone cares to look for it. Even members of Congress themselves admit that this horrible legislation was written by financial corporations, not by those legislators whom The People elected to Congress. Does it really take only simple-minded slogans to turn Americans into simple-minded people who passively support the erosion of their own foundation of freedom? Activists have been fighting against this bankruptcy "reform" legislation for years, and until now they have succeeded--by refusing to allow the financial industries to purchase votes quietly, without the public learning about it. They have my deepest admiration for their hard work and accomplishment in this. However, with recent Senate passage these activists have all but given up, and I'm saddened to see them resign to the idea that this will indeed become law even before it is voted on in the House of Representatives.
We cannot stop this fight now. It is too important. Activists need to accept the fact that sometimes the bad guys win, because bad guys are ruthless and don't obey the rules. But even though President Bush plans to sign this bill into law, it must first pass the House of Representatives, and therein lies our opportunity. We need to Speak Up--and LOUDLY--to everyone who will hear. We need to educate and inform the American People of what is going on at Capitol Hill. We need to encourage not thousands, but millions of Americans to call, write and email their U.S. Representatives and order them to REPRESENT the American People, not the credit card companies. We need to realize that freedom and opportunity in a capitalist society begins with personal financial security, and to commit ourselves to voting entirely on the basis of candidates' records with respect to protecting our citizen's personal finances. We need to inundate every form of news media in America with requets that they give this story the high priority it deserves, and forget about Michael Jackson for a while. There is still much we can do to stop this bill from passing, and we are all guilty of poor citizenship if we fail to try right up until the moment President Bush signs away the American Peoples' life savings to pay for this bill Visa and Mastercard bill.
posted by Paul at 7:47 AM
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