Wednesday, October 31, 2007

Critique of Debt

Nicholas Von Hoffman has an online post for The Nation, Give Us This Day Our Daily Debt, which breaks down the plight of the little guy. The big companies need the little guys (and gals) to buy their products, which is why Henry Ford shocked and awed the world with the first ever raise without request. Somebody needed to buy those cars.

Quoting the Wall St. Journal, the wealthiest 1% rake in 21.2% of all income (2005). One lousy filthy rich percent. That leaves a 12.8% reap for the bottom half of earners. Whoa. Fifty percent of all workers in the entire US equals 12.8% of the earned income pie. That's paltry and putrid. So what happened?

Well, if you've felt your pockets lately you know what happened. You've got more plastic than paper, and the global market party keeps on keeping on. Why pay you more when they can just pay you less and let you borrow more? So not only are we broke, we are disempowered.

    Since so few people have so much of the money locked up and do not plan to share, either the masses cut back on their spending, which is the road to universal disaster, or they must borrow and borrow and borrow without end. Not only the grownups.

    From the point of view of the big rich, getting young people in debt not only keeps the money coming in but also makes youth timid and obedient. Debt ensures that they won't turn up on the streets to demonstrate for some unwholesome cause. You could almost call it a rule that all people--black people, Hispanic people, white people, trailer trash people, college graduate people--when put in debt pretty much do what they are told.


Ms. M&P said...

Wow. Talk about food for thought. I'll be mulling over this for a while. I think the article raises excellent points and I agree with the premises, but some of the conclusions I'll have to think about for a while--like using debt to suppress people. I've thought about that before...I think that consumerism in general can work as a suppressant for "the masses"...but is it an intentional tool? It's a cynical view point, but similar to the "Beer and Circus" type of world view. There are many days that I subscribe to that view, but I do try to be more optimistic about humanity.

The other conclusion that caught me is the one about the wealthy sitting on their money rather than sharing. If it's in the market, does that as sharing? And if the wealthy gave away the money, would that equalize things?

PiggyBankBlues said...

i thought at times it was a little heavyhanded and essentialist, which gave me pause. but like you said, it's food for thought.

i would think that a wealthy person's money in the market benefits the wealthy person more than the avg. american. they're really not "sharing" their money, they're leveraging it. i don't really know about these things, i mean i'm not an economist or a politician, but i would think that things like national health care, a higher minimum wage, a dramatic reallocation of federal spending from war to education, student grants instead of student loans, the regulation of predatory lending, etc., would give the average american a chance at financial independence (among obviously many more benefits).

i did think his conclusion was a bit off. while i think that having debt is disempowering, i don't think that is what motivates the machine. the machine just wants to make a profit, not really suppress people.

in regards to philanthropy, study after study shows that poor and lower middle class people give a far greater percentage of their wealth than upper middle class and super wealthy. sad but true...