The Beginning of Sallie Mae's End

Harvard law professor Elizabeth Warren did not understate the case when she said "Student-loan debt collectors have power that would make a mobster envious".

Thanks to a 60 Minutes segment on the Student Loan Marketing Corporation (aka SLM Corp, aka Sallie Mae) on May 7, Alan at studentloanjustice.org has received more than a thousand emails citing personal experiences ranging from suicide to broken families to American citizens being forced to flee the country--all because of Sallie Mae's predatory lending and terrorist-style collections practices.

Meanwhile, former Sallie Mae CEO Al Lord is allegedly using the spoils of this corporate activity that has destroyed so many lives to put in a bid for a professional baseball team, and to build his own private golf course. With a net worth of somewhere around $250 million, and Sallie Mae's faithful companion in Congress (Rep. John Boehner, R-OH) recently taking over as House Majority Leader, what is to stop Lord from flaunting the money that other people have worked so hard to earn for him? Is his character going to stop him?

Ralph Nader quickly followed the 60 Minutes segment with an essay of this own on the subject, which you may read here. Unfortunately, Nader's essay merely summarizes the 60 Minutes segment, which barely scratched the surface of the savagry that Sallie Mae is famous for among its victims.

Sallie Mae's greatest strength is also it's greatest weakness: It has such a complete stranglehold on debtors, such complete legal immunity against prosecution for "unconscionable" practices, and such complete control of the U.S. Congress, that the huge number of people Sallie Mae has injured have no choice but to take extraordinary action. Even members of the RIAA are smart enough to hide their enormous wealth and their puppet-mastery of Congress on media issues. In a supreme display of sheer arrogance, however, Sallie Mae has not even made an attempt to hide its abominable role in American society. Indeed, Al Lord freely admitted, "It would be very hard for me to tell you that what I make is not a lot of money." Meanwhile, Sallie Mae reportedly sent damage-control emails to colleges and universities the day after 60 Minutes' segment aired. Why would a fine, law-abiding, upstanding, socially-responsible corporation need to engage in this kind of immediate damage-control?

Al Lord will probably end up keeping his $250 million, unless investigators uncover some kind of criminal activity that would force him to forfeit his baseball team, golf course, and any other toys he purchases. The key is to begin the investigation in earnest....

Either way, if Al Lord believes in Heaven and Hell, one must wonder on what conceivable grounds he could expect the other Lord to allow such a man to ever catch even the briefest glimpse of Paradise. No wonder he is building a beautiful golf course, while he still can....

Make no mistake about it, the 60 Minutes segment marks the beginning of the end of Sallie Mae. The company itself will likely continue to be responsible for even more suicides, destroyed families, debtors imprisonment, and other atrocities, for years to come. However, the individuals who are responsible for so much human suffering, while cowering behind the obscure moniker of "Sallie Mae", are finally beginning to have their names written permanently into history, so that future generations may regard them with the contempt they have earned. Not just Al Lord, but other executives, the army of attorneys who carry out Sallie Mae's will like mindless mercenaries, and the members of our U.S. Congress who have betrayed the American People for a bag of Sallie Mae brand gold coins.

Fear Not--Bank Regulators Are On The Job!

In one of the most inadequate examples of journalism I have ever witnessed, a bizarre nine-sentence AP article that briefly appeared today reveals that bank regulators--particularly the Office of Thrift Supervision (OTS)--are "paying close attention" to high-risk mortgages. The article appears to be entirely based upon a speech given before the New York Bankers Association by John Reich, director of the OTS.

What makes this article so bizarre is its content, structure, and complete lack of purpose. Out of 9 sentences total:

5 sentences repeat some variation on the statement that regulators are watching the situation with risky mortgages.

1 sentence mentions that Mr. Reich's speech was distributed in Washington, which is about as useful to the reader as describing the color of Mr. Reich's necktie.

4 sentences contain useful information--but only if you know how to interpret it.

That is nine sentences total, to fully describe one of the major sources of debtors imprisonment in the United States. (I know that adds up to ten sentences, but one sentence had two clauses).

Since the Associated Press apparently does not wish to bother with details, please allow me to fill in the blanks by interpreting those 4 sentences of pseudo-useful information in the article.

Federal regulators are paying close attention to increasingly popular high-risk mortgages and the credit risks they pose for banks, the government's top thrift regulator said Thursday.

Translation: Consistent with the best-known secret in Washington (that regulators are supposed to protect consumers, but ultimately protect those whom they "regulate" instead), the "top" thrift regulator in the United States of America is primarily concerned with the trouble that risky mortgages could cause the banks that irresponsibly issue those loans in the first place. There is no mention of Mr. Reich being remotely concerned with the well-being of American citizens and families whose lives may be devastated by predatory banking practices.

Consumers increasingly have been using them to buy homes they otherwise could not afford.

Translation: If the consumer cannot afford a home, the problem is their lack of income, and lack of income is precisely the reason that it makes no sense to loan them money at any interest rate. This sentence is merely a disguised statement of the fact that banks are engaging in predatory lending to the most vulnerable consumers.

And banks and thrifts have been turning to them to maintain their loan volume and profits in a competitive market, sometimes lowering standards for extending credit.

Translation: The so-called Middle Class are already completely maxed out on credit (i.e., they are in so much debt that they can't handle any more), so banks are moving into the ghetto market to find new customers, even though it is more than obvious that these new customers have little or no means to repay a mortgage. In the short term, however, it looks good on the banks' financial statements to be handing out so many new loans. Again, this is a statement of predatory lending.

The regulators do not seek to stanch innovation by banks, but to encourage sound banking principles.

Translation: This is yet another veiled statement that regulators are more concerned with keeping banks sound, than with keeping consumers sound.

I should also mention that the article never probes the question of why the New York Bankers Association would ever want the "top" official charged with regulating them to speak before their group. One would naturally expect that if Mr. Reich were doing his job well, he would be the most hated man at every bankers association from coast to coast. Trade organizations typically invite only people who are friendly to their own interests to speak....

However, the reality of our pathological regulatory system is that regulators routinely leave their low-paying federal government jobs to take on high-paying positions in the very industries they once "regulated" (*wink*). So it is in their best interests to protect, pamper, and sleep with the industries they "regulate". In other words, federal regulators' work often consists of nothing more than proving their allegience to the industries they are supposed to "regulate", in order to obtain high-paying jobs in the private sector. For example, former Enron CEO Kenneth Lay began his career as a federal energy regulator....

Is it any wonder that the American Debtors Prison can destroy so many lives in the United States, while most Americans remain unaware that it even exists, when the journalists in our corporate-controlled news media don't even attempt to investigate the stories they report?

All the best,
Paul

I Read The News Today. Oh, boy....

Three young black men have been arrested in Colorado for the unprovoked, brutal beatings of three white men as they slept in their homes, in separate incidents that occurred during a tragic two-hour spree of random, senseless violence in suburban Denver. One of the victims, a prominent Littleton attorney, died from his injuries six hours later, his head swollen to three time its normal size.

According to witnesses, the black youths--one age 17, and two age 18--allegedly sought out prosperous white victims completely at random, based on the size of their homes, and battered the victims in the head and torso areas with tire irons and other blunt objects as they slept, using lethal force. Witnesses describe the young attackers as "smiling and laughing" as their startled, unarmed victims struggled in vain to fend off multiple attackers. "They were laughing the entire time. They were enjoying it, like it was fun or something," said the deceased victim's wife, who witnessed the attack but was not harmed.

Public outrage over the sheer inhumanity of the attacks has fueled demands that prosecutors pursue the death penalty, even before the three men had been arrested and charged with first-degree murder and aggravated assault.

Meanwhile, it is beginning to emerge that similar random violence by black youth against white men has been increasing over the past decade all across the nation, yet the media has largely failed to report it. As one telecommunications manager in Chicago said, "This has been going on for far too long. Everyone knows it. But nobody wants to talk about it or do anything about it. It seems like each night I feel more and more afraid to go to sleep. Who knows what you could wake up to?"

Lawyers for the alleged assailants have already begun to establish a defense for their clients in the media, citing broken homes, drug use, and boredom as "just a few of the many social diseases that ultimately led these basically good kids to do some truly awful things."

At least one prosecutor disagrees: "I find it absolutely reprehensible that anyone would even suggest that simple boredom, or a divorce in the family, or a conscious decision among the perpetrators to use drugs, could somehow justify the inhuman brutality of bludgeoning a defenseless stranger to death while the victim peacefully sleeps in his residence, with no motive other than pure, unadulturated hate. There is no reasonable explanation for this crime, unless you are willing to use the word 'evil'."

Although publicly, prosecutors have been quiet about whether or not they intend to pursue the death penalty, legal analysts say that the death penalty is almost a certainty for all three men in this case.

You may wonder why I would post news of brutal attacks and murder here, in the American Debtors Prison blog. The reason is because there is a striking similarity between the way our legal system treats "deliquent" debtors, who have committed no crime, and the way it treats those who are accused of committing the most savage of felonies.

The three assailants in this news story are black, and there remains to this day a vast disproportion of black prisoners to white prisoners on death row across the United States. The racism inherent in our legal system's decisions on whether or not to pursue the death penalty for similar crimes is perfectly evident to anyone courageous enough to face that reality. In this particular case, people were calling for the death penalty even before the alleged assailants had been arrested or charged with any crime at all--yet after they had been identified by witnesses as being black.

The exact same thing happens in the American Debtors Prison. Financial service industry propaganda has focused exclusively on debtors who default for any reason as being "delinquents" or "deadbeats", while entirely avoiding the significant matter of just who initiated the problem by consciously agreeing to risk a financial loss by loaning money to consumers in the first place. The industry certainly never mentions the vast amount of resources it devotes to researching and producing rhetoric, propaganda, and psychological manipulation of consumers that is necessary in order to convince otherwise responsible consumers to enter into debt obligations--a euphemism for indentured servitude, or slavery.

In other words, "delinquent" debtors have been demonized by financial service industry propaganda in the media to the point where there is an inherent bias--a negative "gut" reaction--against any debtor who defaults for any reason--even if their job was downsized or outsourced to communist China, they were incapacitated in an accident, suffered gross hardship from a divorce or death of a spouse, or any other reason that is completely unrelated to the debtors desire and intent to repay their debts in full.

If you don't believe me, try the following experiment. I have separated various words and phrases into two categories below, and the connotation (emotional "feel") of each category is obvious. Ask yourself honestly, do you feel comfortable moving any of these words or phrases from one category to the other?

Hard Worker Saint President Philanthropist Hero

Lazy Bum Terrorist Criminal Murderer Delinquent Debtor

The question is, why would you feel that "Delinquent Debtor" is so very different from "Philanthropist", "Hero" or anything else in the first category that you cannot imagine moving it away from murderers, criminals and terrorists? Recall the recent NACBA report that showed 79% of debtors in financial trouble are in trouble because of circumstances "beyond their control"--death of a spouse, incapacitating illness, loss of job to downsizing, etc. Why would you rather classify someone who was unable to work because they were involved in a terrible car accident alongside murderers and terrorists, rather than moving them alongside heros and presidents?

After all, before that car accident, that debtor might have been doing the work of a saint--and might still be doing the work of a saint, infosar as it is possible under the circumstances?

The answer, quite simply, is that decades of carefully orchestrated financial service industry propaganda in the mass media has conditioned Americans to feel distaste whenever they hear the phrase "delinquent debtor". Notice that I said feel--not think. When you use your mind and think for yourself, you begin to realize that each debtor has their own unique circumstances. And only then might you recognize that bad things happen to truly good people which prevents them from being able to repay debts that they have every desire and intent to repay.

Trapped in an endless blizzard of media images about "members" having "privileges", and repeated assertions that only those who pay their bills on time are "responsible" consumers (rather than irresponsible debtors), we have been trained like Pavlov's dog to have an emotional, gut reaction every time we hear the words, phrases and euphemisms that financial service industry propaganda has programmed us to feel uncomfortable about.

And it is precisely this programming that allows the financial service industry to cast sane, sober, hard-working, responsible American citizens into the American Debtors Prison, with no means of escape by non-miraculous means, and in full view the the world--all without anyone even noticing.

This is an example of exactly the same fundamental principle of propaganda that allows a white supremist organization to raise children who feel nothing except digust, contempt and hate whenever they see a black person. It's a gut reaction; they aren't thinking at all. Pavlov's dog.

If you think you are so well-educated, so great a thinker, and so intuitive that you could never fall for such simple-minded brainwashing by people who serve evil interests in this world, then consider this question carefully: What was your "gut" reaction to public demands that the three black men in the news story above receive the death penalty? Don't just feel the answer, but take a moment to truly think about it. Be honest with yourself, even if you are an opponent of the death penalty on principle.

The simple truth is, if you are white, there is an overwhelming likelihood that deep down, in your gut, you felt that these three black men deserved to die (or at least receive excruciating punishment) for their crimes.

Excruciating punishment, and death, are also characteristics of the American Debtors Prison, which supposedly only applies to "deadbeats" and "deliquents".

If I haven't already made my point clear, then consider this. The news story above about brutal beatings in Littleton, Colorado is fictional. I made it up. There is no epidemic of young black men senselessly beating prosperous white men all across the United States. It never happened. However, something equally tragic did happen. Here are the known facts of that case:


It was actually three well-to-do upper middle class young white men from a city called Plantation, Florida (seriously), who are alleged to have randomly sought out minority homeless men to brutally beat and kill with baseball bats, while smiling and laughing, on the sole basis that they believed homeless persons are inherently "deadbeats", something less than human. Other than changing a few details, the brutality, savagry, and senselessness of these crimes was exactly the same as described above. The head of the victim who died six hours after being beaten (Norris Gaynor) had swollen to three times it's normal size. And the white kids who did it laughed. Their names are William Ammons, Brian Hooks, and Thomas Daugherty.

Yet there is no public outcry for these three young men to receive the death penalty. In fact, news media reports have all but exonerated these three savages by repeatedly pointing out that they came from broken homes, were bored, and smoked pot. It wasn't their fault. Something must have went wrong in their utopian, suburban upbringing that led to their "mistake". They were basically good kids who did an awful thing. They weren't evil. They weren't black. They weren't homeless. They weren't "delinquent debtors".

And so the media struggles to determine what went wrong with these young white men, what happened to them, rather than what they did. This quest for external influences that are beyond a person's control is something that the media never conducts when describing "mistakes" made by blacks, the homeless, or debtors who default. That is why there are vastly more blacks on death row than whites. That is why there are 3 million homeless people in the wealthiest nation the world has ever seen. And that is why no one acknowledges the existence of the American Debtors Prison until they have experienced it from the inside, as an inmate.

Freedom begins in the mind, and Americans have had their minds utterly brainwashed by financial service industries to believe that anyone who defaults on a debt for any reason deserves the ultimate punishment: The American Debtors Prison--a fate that may be worse than death.

It is time for Americans to wake up and begin thinking for themselves again, rather than allowing gargantuan corporations that control the mass media to program them how to feel. Only then will we stop modern day atrocities like racism, homelessness, and the American Debtors Prison.

By the way, there is, and has been for many years, an epidemic of savages beating homeless people for "fun", or out of sheer hate. This has gone on across America for years. But homeless people are not prominent attorneys, so the media has never concerned itself with this ongoing abomination.

Lastly, it is noteworthy to mention that a surprisingly large number of America's 3 million homeless people are otherwise sane, sober, responsible, good citizens, and hard-working. The only reason they don't have a home is because the are inmates in the American Debtors Prison.

But you won't see that in the mass media either--until I have completed the American Debtors Prison film.

All the best,
Paul

Bankruptcy "Reform" Law Isn't Working--Or Is It?

The National Association of Consumer Bankruptcy Attorneys has released a damning report concerning the efficacy of last year's bankruptcy "reform" law--at least in terms of the law's stated purpose. Unfortunately, the law's real purpose is being fulfilled magnificently.

The law's stated purpose, as indicated by its euphemistic title "The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005", is to prevent people from using the bankruptcy system as a "financial planning tool". Of course, it is sheer insanity to suggest that a poor person in the age of modern debtors imprisonment could ever conceivably use bankrupty as a tool for building wealth. However, as you may recall, the law applied almost exclusively to poor people, but did nothing to prevent corporations and wealthy individuals like Donald Trump from using bankruptcy as a financial planning tool. To quote from my own blog entry on Trump's latest bankruptcy in April of 2005:

"No such problems for Mr. Trump, however. His latest bankruptcy is the definition of smooth-sailing. Under the Chapter 11 reorganization plan, Trump's company will borrow $500 million to refurbish it's casinos, and expects to save some $98 million annually with lower interest payments."

Passage of a law that even members of Congress themselves admit was written by the credit card industry will certainly be regarded by future generations as one of the darkest moments in American history (learn more here)--as will Hillary Clinton's reprehensible role as the only senator who did not even bother to vote on the bill at all, in a sickening betrayal of the American People that could only have one selfish purpose: to enhance her chances of winning the presidency in 2008.

The NACBA's report analyzed 61,335 people who have used the services of credit counseling agencies since the law went into effect in October 2005. The report's findings are as shocking as they are predictable:

97% did not have the means to repay any debts.
79% had fallen into financial trouble due to huge medical bills, death of a spouse, or loss of a job.

Hardly the description of 61,335 "deadbeats" who are abusing the bankruptcy system as a "financial planning tool".

Which brings us to the real purpose of this "reform" law--to allow the financial service industries to exploit and manipulate consumers through predatory lending, to terrorize defaulted debtors unimpeded by constitutionally-mandated bankruptcy protection from creditor harassment (the real purpose of bankruptcy), and to force consumers into the American Debtors Prison, with no means to escape.

That purpose fits perfectly with the data obtained in the NACBA's study.

As one would expect, the financial service industries have a creative explanation for why the NACBA report contradicts everything they based their bankruptcy reform law on. AP writer Marcy Gorden quotes one banking industry public relations officer as saying that "the recent trend in filings was 'a very small snapshot of the (bankruptcy) system right now. ... We haven't gotten to a 'new normal' right now".

And with that brilliant analysis--which contradicts reason, the history of usery, and the observed facts--the banking industry walks away from one of the worst Congressional scandals in American history, unscathed.

The 'new normal' is the American Debtors Prison. Bought and paid for by the financial service industries, and delivered to your door by your own elected members of the United States Congress.

You may read the entire NACBA report here (72KB, PDF).

All the best,
Paul

The Temporal Credit Assignment Problem

The results of a scientific study on rats seems to indicate that our brains learn by going over previous events in reverse, on the premise that our last action before success was the action that resulted in success, so our brains tend to focus on that event and work backwards.

Whether or not this is true is another story. What makes this relevant to debtors imprisonment is that it relates to a well-known dilemma in decision-making theory, called the Temporal Credit Assignment Problem.

The Temporal Credit Assignment Problem basically asks the question, if you've never done something before, how do you decide where best to begin? For example, if you've never played chess before, how do you know which opening move is best the first time you play (assuming you haven't been previously tutored)? The answer, of course, is that you can't know what the best move is. You might make the best move by random chance, but you can't know what the best move is the first time you play. You learn the best moves by practice, practice, practice--just like any other endeavor in life.

Which raises the question, how does a 16, 17, 18, 19, 20 or 50-year old American citizen know how best to handle their personal finances, if they have no previous experience with finances to learn from? If their goal is financial security and prosperity, where do they begin?

The answer is that they can't know where to begin. They can only begin by making some decision--any decision, and noting the success, failure or neutrality of the result. They can then learn from the experience to inform them on their next move. That is just the way human life is.

But the American Debtors Prison does not even attempt to recognize this fact of life. Instead, like a predator, the wardens of the American Debtors Prison use the Temporal Credit Assignment Problem as a weapon against people who have little or no experience with finances--particularly young people.

For example, if you are 18 years old, recently graduated from high school, you have a lot of decisions to make that will dramatically affect the course of your life over the next several decades. Where to live? Where to work? Go to college? Who to date? What to prioritize? Who to believe? All these questions must result in conscious or unsconscious decisions, if you are to get out of bed each day at all.

It is financially suicidal for a non-wealthy citizen of a capitalist nation to go into debt, because capitalism implies freedom, and debt is slavery. To go into debt when you are 18 years old is to subjugate your freedom to the whims of another person or institution from the very beginning of your adult life. Yet 18 year olds are inundated with credit card solicitations, offers of "low interest" student loans, sales pitches for new cars and hundreds of other unnecessary toys, and business "opportunities" that might at first glance appear to offer the key to future success.

But without any experience whatsoever, how is an 18 year old supposed to make an intelligent, informed decision about credit cards, student loans, sales pitches, or business "opportunities"? They can't. The best they can do is make any decision at all, and use the results to learn how to make better decisions in the future.

It is tempting to suggest that an 18 year old may seek tutoring from teachers, books, parents, and successful friends, to help them make good decisions from the beginning. The problem here is that very few adults are capable of handling their finances responsibly--and even when they do it is accomplished by the grace of good luck, because financial security is always contigent on the whims of others. (Example: If Americans suddenly agreed that cash was worthless, and breadcrumbs were the new currency, Warren Buffet would be forced to hunt for breadcrumbs in order to eat each day--this multi-billionaire would actually have to labor in order to earn the breadcrumbs to pay for his daily needs).

Is it wise for an 18 year old to trust the advice of a credit card company when planning their financial security, considering that credit card companies operate using the same fundamental principles that drug dealers use? Is it wise for an 18 year old to trust the advice of a college student loan officer, whose job it is to approve loans that fund his own salary--loans that must be repaid by the student alone over 10 years or more, at interest, with no legal requirement for full disclosure of the consequences of default beforehand?

One of the reasons the American Debtors Prison represents a bona-fide human atrocity is because it can only exist by exploiting inherent weaknesses that are a natural part of being human, like the fact that humans cannot make wise decisions without first gaining the experience needed to evaluate those decisions. Those who use debtors imprisonment as a means of enslaving others do not go after Bill Gates or Warren Buffet--not because those men have no money (they are multi-billionaires), but because they possess enough life experience to avoid making fundamentally bad decisions with their finances (usually).

No, the wardens of the American Debtors Prison go after 16, 17, 18 year olds. They go after young, recently married couples looking to purchase their first home. They go after intelligent, but poor people who crave a higher education without the means to afford one. They go after ambitious, but inexperienced older folks who are seeking genuine "opportunities" to prosper. They do this because once imprisoned, it is impossible to escape the American Debtors Prison by non-miraculous means, and the only people who are susceptible to debtors imprisonment are those who are ignorant of the fact that debt IS slavery.

However, just like drugs provide a quick high, and one must continually get high to avoid "coming down", experimenting with debt allows inexperienced people to enjoy a new car, a college education, an XBox, or anything else that gives them a "high"--all before they have worked to pay for it. The consequences come later. But just like drugs, debtors can maintain the high by repeatedly going into debt as a means of forgetting all those bills they are obligated to pay. This is precisely the behavior that credit card companies and other creditors devote their efforts to promoting. And just like a drug dealer, as long as they can keep attracting new recruits they couldn't care less whether some of their earlier customers overdose and die--or enter the American Debtors Prison.

The American Debtors Prison is an atrocity, perpetrated by those who exploit natural human weaknesses for their own advantage, regardless of how many other peoples' lives are destroyed in the process. It is a land of predators and prey. And from the young or inexperienced person's perspective, the field of decision-making is littered with land-mines because of the Temporal Credit Assignment Problem.

Comprehending this is the first step toward avoiding the catastrophe of debtors imprisonment.

All the best,
Paul

ChoicePoint Lightly Tapped On the Wrist for Data Breach

The Federal Trade Commission has fined ChoicePoint, Inc. $10 million dollars for a "data breach" that sold personal information on 163,000 people to an alleged crime ring. ChoicePoint will also spend $5 million dollars to set up a fund to help victims of the identity theft that will inevitably result from the company's gross irresponsibility.

According to FTC chairman Deborah Platt, "This is an important victory for consumers and an opportunity for ChoicePoint to get data security right." The FTC has also proudly noted that this constitutes the largest fine it has ever imposed on a company for failure to keep personal data secure.

The problem is, this fine represents even less than a slap on the wrist to ChoicePoint. A slap on the wrist hurts. This fine doesn't.

Executive Paywatch informs us that the CEO of ChoicePoint, Derek V. Smith, enjoyed $8,960,165 in total compensation in 2004. He also received $6,639,293 by cashing out some stock options. Not only that, but Mr. Smith has another $88,882,599 awaiting him from stock options not exercised in previous years. (see details here).

In other words, for irresponsibly placing 165,000 American citizens at risk of financial catastrophe, criminal victimization and debtors imprisonment, ChoicePoint was fined less than the amount that just one of their employees "earns" in one year.

Inmates in the American Debtors Prison eventually learn the fact that their government does nothing to protect their rights, or to prevent others from harming them. But this token gesture by the FTC should make it evident to every U.S. citizen that the U.S. Government fully supports debtors imprisonment of the poor by the rich. The personal cost of this "data breach" to each victim relative to their resources is profoundly higher than the price that ChoicePoint has been required to pay in compensation.

If the U.S. government truly took identity theft and debtors imprisonment seriously, there could have been only one outcome: ChoicePoint would have had its corporate charter revoked, and its assets sold to compensate its victims. Instead, it was lightly tapped on the wrist by the Federal Trade Commission, in a manner that only lovers can appreciate.

Happy Valentines Day,
Paul

The Birth of The American Political Prison

Several day ago, the news broke that U.S. President George W. Bush has authorized the state security apparatus to spy on American citizens without due process of law. In that time, I have struggled to decide how to address such a serious issue. The only thing that saddens me more than Bush's fundamentally misguided decision to spy on The People, is The Peoples' unwavering resolve not to care about it, let alone do anything about it.

Fortunately, even the mass media has publicized this issue, and writers around the nation are making the arguments that need to be made against domestic surveillance. That is pretty easy to do, since those arguments are perfectly obvious to anyone who understands the most basic principles upon which the United States of America was founded (i.e., support for personal liberty, and opposition to government tyranny).

So I've decided to use this opportunity to explain how a virtual prison like the American Debtors Prison orginates, because what President Bush has effectively done by authorizing domestic spying is to inadvertently authorize the creation of The American Political Prison.

First and foremost, the American Debtors Prison is a virtual prison, in which the "chains" that bind are actually the electronic transfer of personal information about debtors from one place to another. For example, if a debtor defaults for any reason and begins to be terrorized by collection agents, they could previously move to another location ("skip"), re-establish their ability to earn an income without interference from collections terrorists, and return to a position of financial stability that would allow them to repay their defaulted debts. The electronic transfer of personal information in the American Debtors Prison makes "skipping" all but impossible today, because the instant a debtor establishes residence in another location, collection agencies know about it. And collectors will immediately begin to interfere with the debtor's ability to earn an income just as before, by terrorizing them at home and at their new job, illegally revealing their defaulted debts to new co-workers in a misguided attempt to coerce payment, etc. There is no escape from the American Debtors Prison by non-miraculous means, because the electronic transfer of personal information allows anyone to track any other person, anywhere, at any time. The American Debtors Prison has utterly annihilated the concept of personal privacy, in the most profound sense imagineable.

But what is domestic spying, if not a fundamental invasion of privacy in a nation that prides itself on constitutional guarantees of personal liberty? The U.S. government does not have warehouses full of people listening to phone calls live, reading emails as they are sent, or otherwise introducing a human interpretation into the vast amount of personal information they gather. Just like the credit bureaus, which claim to be able to determine unique human beings' characters by creating a standardized scoring system based on nothing but data of dubious authenticity and credibility that is stored in computers, the U.S. governement analyzes the bulk of its data using computers to "listen" for certain words in your telephone calls, using computers to scan emails for certain words and codes, etc. It is all done by computers--the very same kind of computers that give us the "blue screen of death" at the most crucial times in our own daily use of computing technology.

In other words, the U.S. government's ability to discern anything meaningful about a typical subject's intent is no different than credit bureaus' ability to discern anything meaningful about a typical debtor's intent. The government can't discern anything meaningful at all about peoples' intent by merely intercepting their communications and using computer programs to analyze discrete examples of their language and behavior out of context. Especially in the United States, where The People are supposedly enjoy freedom of speech, analyzing that free speech with computer programs cannot possibly lead to accurate assessments of real peoples' character and intent. (Human analysis cannot succeed in that regard either, for that matter). For example, do YOU know anybody who says one thing, and does something completely different? Or more to the point, do you know anybody who doesn't?

Here's an example from the American Debtors Prison: A debtor's credit report generates a score that classifies him as "high risk", which naturally implies that the computer program which generated that score was somehow able to discern details of his character. However, when a human being investigates the matter, she may discover that something entirely different is really going on. Perhaps the debtor fell "off the radar" because he is working 80 hours a week doing odd-jobs for the enormous amount of cash necessary to hire an attorney who can negotiate with his creditors, precisely because he intends to repay his debts. After all, the American Debtors Prison itself prevents debtors from obtaining gainful employment through normal channels, so it only makes sense that many debtors prisoners would be forced to go "off the radar" if they are to survive at all. Conscious attempts to elude tracking by predatory lenders and terrorist collection agents does not necessarily mean that everyone who "skips" is trying to run away from their debts. It can just as easily mean they are diligently trying to repay their debts by the only means creditors have left available to them (which literally requires them to "run away" from collection agents, since collections terrorism represents a major, if not an insurmountable obstacle to earning an income with which to repay debts).

No computer program can discern an individual's true intent by merely cataloguing and classifying a tiny subset of the nearly infinite variety of possible human responses to extraordinary stimuli like collections terrorism. But the credit bureaus claim they can identify a true "deadbeat" by simply scoring whatever inaccurate, contradictory, incomplete information exists in their databases. And so does the U.S. government claim that it can identify a true "terrorist", using essentially the same criteria.

In other words, domestic spying is about as reliable at identifying terrorists as credit reports are at identifying "deadbeats". Which is to say, it is not reliable at all.

Yet all of that information the U.S. government gathers about its citizens in its futile attempts to identify terrorists does go somewhere. It goes into various files and databases, where it may be lost, stolen, or shared with other government agencies. This massive dissemination of personal information, taken completely out of context, and rarely if ever interpreted by intelligent human beings, is analogous to the credit bureaus' endless quest to gather, store and distribute personal information about consumers. The end result is a glut of so much dubious information that there is no conceivable way to analyze it at all and arrive at accurate conclusions. So the agencies who gather, share, and analyze so much data have no choice but to resort to heuristics (analytical shortcuts) instead.

In this way, a teenager who borrows a library book about the Manhattan Project for a book report can be flagged by some government computer program as a "potential" terrorist. And that is the status this citizen will possess in top-secret government databases until an intelligent human being finally investigates the matter and "clears" him. If no intelligent human ever researches this, that citizen will carry the label of "potential terrorist threat" for the remainder of his or her life, without even being aware of the fact--until it suddenly becomes a weapon to be used against him (perhaps when he runs for President of the United States 30 years later--because he is a good citizen and a patriotic American). This is precisely what happens to debtors prisoners when they suddenly realize what financial institutions and credit bureaus have been doing to them all along, quietly, behind the scenes, without their knowledge, until it was too late.

President Bush's decision to spy on American citizens is not only an attack against everything the United States of America stands for, it is an example of exactly what we should be fighting against in the so-called War on Terror. There is probably nothing Osama Bin Laden would love more than to make American citizens distrust each other to the point where democracy, freedom, liberty, constitutional rights, rational thought, and simple human decency grind to a halt in the United States, causing us to destroy ourselves with no effort at all on his part. President Bush is making Bin Laden's dream come true.

Likewise, if it were possible, the credit bureaus would store every detail of your personal life, right down to a play-by-play of every action you take, every moment of every day. Why? Because they have carefully cultivated a mythology in our society that they, and they alone, are able to discern a citizen's true character and intent--as long as the credit bureaus have enough personal information to feed into their computer programs and generate a score. The simple-minded theory they proffer is this: the more information you plug into the computer, the more accurate the result will be. It is a fundamentally misguided, if not downright stupid theory.

But here is a secret: even the credit bureaus are aware that this analysis is bullhit! However, they continue the ruse because it is the perception that the credit scoring system works that creates "added value" to their services, not the reality of whether or not that system actually works (and the reality is, it doesn't work well at all).

The credit bureaus would joyfully sacrifice YOUR personal privacy down to the minute details of every movement you make, every moment of the day--if it were possible to do so--because that is what maintains the illusion that they have a useful product to sell at all. Even though doing so would create such a degree of false accusations, distrust, faulty assessments of individual character, corruption and other unintended consequences, that the fabric of society itself would be put at risk. But the credit bureaus don't care about that; non-human corporations have no national loyalty. They are only in it for the money. This kind of capitalist fundamentalism is a concept that Osama Bin Laden could easily relate to, and it can be articulated simply:

"Even if every other person on the planet suffers, and the entire world is destroyed, it's worth it as long as I get what I want."

Likewise, President Bush is merely maintaining a grand illusion with his domestic spying program, with no foresight at all, no comprehension of the unintended consequences that must inevitably result. Nothing good can come from gathering, storing and distributing information about the one subset of human beings on earth (American citizens) who are least likely to want to cause the United States harm. Yet, all the personal information gathered WILL end up in documents and databases, and it WILL be analyzed by computer programs, and it WILL cause a lot of citizens a lot of problems. If not today, then perhaps a year, or a decade from now. The information gathered never goes away--is only gets shuffled around, obfuscated, corrupted, and placed even more out of context than it was when it was originally gathered.

Make no mistake about it--the similarity between domestic spying and modern debtors imprisonment are profound. And since the American Debtors Prison is a virtual prison that is built on personal information gathered and analyzed out of context, it is not unreasonable to expect that the U.S. government's gathering and analysis of personal information out of context can only lead to a similar type of virtual prison--the American Political Prison.

The Third Reich kept a lot of files on its own citizens too--probably more so than the intelligence it gathered on foreign enemies. Those files were stored on paper (and to an extent, on primitive computer punchcards supplied by IBM). Today's files on American citizens are stored in a complex network of modern computer databases, linked together in a manner that remains Top Secret. This represents a crucial distinction between domestic spying in Nazi Germany decades ago, and in the United States today. Even so, there is no good reason here to challenge the aphorism that those who do not learn from history are doomed to repeat it. The problem is that too many people are trying to learn from the wrong history lesson.

Like the Holocaust, the American Debtors Prison is a bona-fide human atrocity that posterity will liken to human slavery in terms of it's barbarism and injustice. So what else can we really expect to come from President Bush's decision to essentially create the infrastructure for a virtual American Political Prison which, for all intents and purposes, is identical to the infrastructure of the American Debtors Prison? After all, the Nazis thought they were doing the right thing for their country, too. The Law of Unintended Consequences means that those who commit atrocities might very well believe they are actually doing good work. To my knowledge, neither Hitler, nor Osama Bin Laden, nor President Bush, nor the credit bureaus, nor Satan himself, has ever confessed to doing evil.

No, if we are to truly comprehend the implications of domestic spying in the United States we must not look to emotional political rhetoric about Nazi Germany for answers. The stakes are simply too high for that kind of intellectual negligence. We must look instead for the most fundamentally similar example from history, and learn from it. But neither Nazi Germany nor Al Quaeda represent good analogies for domestic spying in the U.S., because neither are based on a network computerized information systems that store and analyze personal data about human beings out of context. Only the American Debtors Prison provides a clear example of what must inevitably result from President Bush's decision to spy on the very citizens who elected him to office. All we need to do is recognize the enormous amount of human suffering that the credit bureaus have caused among the very consumers that brought the credit bureaus to power, and the future consequences of domestic spying become clear.

All the best,
Paul

Update on San Diego Terror Tactics

As "they" so often point out, the truth is often stranger than fiction.

Almost four weeks ago to the day, I posted a commentary concerning San Diego City Attorney Michael Aguirre's decision to use standard terror tactics to collect city debts from "deadbeats" (See November 21 entry below). In that post I mentioned that the majority of the debts being collected are of a dubious nature, and many of them are owed by government agencies--including the city of San Diego itself.

Well, today, the San Diego Tribune reported that Mr. Aguirre himself has been fined $9,000 by the San Diego Ethics Commission, for failing to properly disclose how he spent appromixately $316,000 during his campaign for City Attorney--the position from which he launched his campaign of public humiliation (i.e., terror) against 500,000 San Diego "deadbeats" who have not paid their various fines, fees and such. I can only assume that unlike many of the half million relatively impoverished people he is attempting to collect debts from, Mr. Aguirre can probably handle a $9,000 fine out of pocket. At the very least, we know that if Mr. Aguirre does not have a spare $9,000 laying around, he will be certain to post his own name on his own "deadbeat" website. Right? Because Aguirre is an honorable man.

To be fair, the ethics commission did not find any intent to mislead or misrepresent his management of campaign funds. He simply failed to follow the rules properly, and having run for public office myself I can assure you that the ethics rules for campaign finance run slightly south of comprehensibility.

But then again, that is my point. Most debtors who don't pay are not "deadbeats" or criminals at all. Something--often beyond their control--happens to interfere with their ability to repay debts on the rigid, inflexible schedule demanded by creditors. For example, they might suddenly be hit with an unexpected $9,000 fine when they don't have that much cash laying around.

The question is this: Is Mr. Aguirre a clear enough thinker to make the connection, or will he think that his case is somehow a "special" circumstance, and it is only those 500,000 accounts that did not get fined by the ethics commission who are "deadbeats".

The American Debtors Prison is ultimately founded on hypocrisy, stupidity, absurdity and irony (in addition to pure greed, powerlust and other creditor character flaws). However, it is precisely because of this that sometimes, by random chance, the irony actually turns the tables on the wardens. Like when a bank or financial corporation (that claims by definition to know how to handle finances better than the "masses") goes bankrupt. Or when a man who uses the sheer terror of public humiliation to collect debts himself ends up in the news for committing an ethics violation.

All the best,
Paul