Posts Tagged ‘Debt’

What Kind Of Planet Are They Living On?

December 17, 2020

            The news of the past week seems to be supported by an undertow of statistics. A blur of staggering numbers appear to back everything up, whether it be Covid 19 rates, unemployment, potential relief funding, hunger, future evictions as well as current homelessness, etc. Not only that but Wall Street keeps climbing on the enormous debt and the potential for even more debt coming down the pike. Traditionally this would anticipate hefty Holiday Bonuses for traders and brokers. Will it be that way this year? Bucking a trend of traditional and inevitable thinking/reasoning seems to be an unpleasant necessity for regular folks, but is unimaginable for Newark area community leaders. Even a morbid change like the pandemic makes no impression. It used to be called “business as usual”, but what is the usual today? In Newark, Ohio, Kent Mallett’s report, headlined Licking County Courthouse windows to be replaced in 2021; cost at least $1.25 million (12-16-20, Newark Advocate), covers the exceptionally unimaginative. “Licking County Commissioner Tim Bubb said the project won’t be cheap, nor quick, but the time is right.” According to Mallett, Bubb says “”We want historically-looking windows with 21st Century technology. That’s going to be the challenge. It’s a process like a custom remodel. We’re putting it in there for the next half century.”” For this the commissioners are putting the residents of Licking County in deeper debt? Meanwhile, back at the ranch, the former Family Dollar store building, promised as a low barrier shelter and just blocks from the already twice remodeled Court House, sits cold, empty and vacant. Lines at food pantries are longer, including some “first timers” who not long ago volunteered at them. And… well, Analysis points to the above for the dizzying array of shared lack backed up by a passel of numbers all representing real situations or people. A rather bleak winter is upon us. But Tim Bubb and his fellow successful Republican leaders must dwell in the eternal sunshine of a bright tomorrow. ““We’re putting it in there for the next half century.”” The debt based capital investment that they are putting “in there”, the Halls of Justice, assumes there will be a “human resource” around to benefit. With no investment in this resource, what kind of “next half century” are they envisioning? One with pristine “historically-looking” buildings and people living in tents? What kind of planet are they living on?

We Pretend To Work; They Pretend To Pay Us

December 3, 2020

            Wall Street’s DOW set a record high by going above 30,000 Tuesday (11-24-20). Many alibis were given. None explained how money could be making money when financial and personal misery is the coin of the kingdom. Analysis found a modicum of explanation for the financial sector outperforming amidst the otherwise abysmal condition of what ostensibly supports the market – employment, production and service. The late David Graeber is primarily remembered for his voluminous Debt: The First 5,000 Years. His last book came out in 2018. It is entitled Bullshit Jobs. What is a bullshit job? 

“consider the following quote, from an interview with then US president Barack Obama about some of the reasons why he bucked the preferences of the electorate and insisted on maintaining a private, for-profit health insurance system in America: “I don’t think in ideological terms. I never have,” Obama said, continuing on the health care theme. “Everybody who supports single-payer health care says, ‘Look at all this money we would be saving from insurance and paperwork.’ That represents one million, two million, three million jobs [filled by] people who are working at Blue Cross Blue Shield or Kaiser or other places. What are we doing with them? Where are we employing them?” I would encourage the reader to reflect on this passage because it might be considered a smoking gun. What is the president saying here? He acknowledges that millions of jobs in medical insurance companies like Kaiser or Blue Cross are unnecessary. He even acknowledges that a socialized health system would be more efficient than the current market-based system, since it would reduce unnecessary paperwork and reduplication of effort by dozens of competing private firms. But he’s also saying it would be undesirable for that very reason. One motive, he insists, for maintaining the existing market-based system is precisely its inefficiency, since it is better to maintain those millions of basically useless office jobs than to cast about trying to find something else for the paper pushers to do.” (pg. 157) A more contemporary and local example would be Ohio’s HB6 debacle which props up 2 scheduled-to-be-decommissioned nuclear power plants as well as two completely redundant coal fired power plants while dissing more efficient and sustainable forms of energy production. So much for bullshit jobs though it is important to understand the function they play in the “market” and why their existence is deemed desirable (Hint: they justify the funneling of money from the bottom to the top, as in 1%). Graeber does let drop some insights that contribute to our question regarding the current record DOW in really abysmal  times: “It’s almost impossible to get accurate figures about what proportion of a typical family’s income in, say, America, or Denmark, or Japan, is extracted each month by the FIRE sector [Finance, Insurance, Real Estate], but there is every reason to believe it is not only a very substantial chunk but also is now a distinctly greater chunk of total profits than those the corporate sector derives directly from making or selling goods and services in those same countries. Even those firms we see as the very heart of the old industrial order – General Motors and General Electric in America, for example – now derive all, or almost all, of their profits from their own financial divisions. GM, for example, makes its money not from selling cars but rather from interest collected on auto loans.” (pg. 177) So much for the stock market being about employment, production, and service. But wait, he has more: “It just seemed to make sense that, just as Wall Street profits were derived less and less from firms involved in commerce or manufacturing, and more and more from debt, speculation, and the creation of complex financial instruments, so did an ever-increasing proportion of workers come to make their living from manipulating similar abstractions.” (pg. 150) Almost prescient of what the current pandemic has revealed he writes: “if you complain about getting some bureaucratic run-around from your bank, bank officials are likely to tell you it’s all the fault of government regulations; but if you research where those regulations actually come from, you’ll likely discover that most of them were written by the bank.” (pg. 17) “JPMorgan Chase & Co., for example, the largest bank in America, reported in 2006 that roughly two-thirds of its profits were derived from “fees and penalties,” and “finance” in general really refers to trading in other people’s debts – debts which, of course, are enforceable in courts of law.” (pg. 177) “There’s a lot of questions one could ask here, starting with, What does it say about our society that it seems to generate an extremely limited demand for talented poet-musicians but an apparently infinite demand for specialists in corporate law? (Answer: If 1 percent of the population controls most of the disposable wealth, what we call “the market” reflects what they think is useful or important, not anybody else.)” (pg. xx) For Graeber the contemporary stock market is all about trading in debt. This contributes substantively as to answering why Wall Street’s DOW is continuously in record breaking territory during these abysmal times; abysmal because debt is implicated in everything, even in “gov’t bailouts.”

The Quality Of Enabling Is Not Strained

August 17, 2018

In a recent NY Times Op Ed (The Debt-Shaming of Stacey Abrams: Our pernicious double standard on politicians who owe money. 8-17-18) Michelle Goldberg elaborates the blatant class bias found within our democracy regarding debt. This is of interest after considering Abrams’ run for Georgia Governor in the 7-29-18 posting entitled Unspoken.  Analysis isn’t considering the national debt soaring to over a trillion here. More something along the lines of the previous posting (How Sausage Is made). Goldberg writes: “But Republicans think they can damage Abrams by going after her on the issue of her personal debt, which totals more than $200,000.” She goes on to mention other candidates receiving like treatment during this midterm year, NY’s Jumaane Williams (“for owing money on a failed restaurant venture and for losing a house to foreclosure”) and Wisconsin’s Randy Brice (“faced criticism for his debt, including $1,257 in late child support that he paid off last year, as well as a 1999 bankruptcy”). The reasons for the debt are various: Abrams for her education and caring for family crisis while Brice struggled with cancer without insurance, a personal crisis. Goldberg goes on to point out that our president had 6 bankruptcies on record when he ran, his son-in-law “paid a record-setting $1.8 billion for a tower at 666 Fifth Avenue in 2007, near the height of New York City’s real estate market. His family’s company struggled to deal with the resulting debt before being bailed out this month by Brookfield, a real estate company whose investors include the Qatar Investment Authority. Any ordinary person who repeatedly squandered family money on bad bets the way Kushner has would most likely be seen as a deadbeat and a loser.” and Abrams’ GOP opponent, Brian Kemp, “a multimillionaire who is being sued for allegedly failing to repay a $500,000 loan used to buy supplies for an agricultural company he invested in.” In a nutshell, “This line of attack throws a pernicious political dynamic into high relief. The financial problems of poor and middle-class people are treated as moral failings, while rich people’s debt is either ignored or spun as a sign of intrepid entrepreneurialism.” But Goldberg’s assessment is pretty topical – class and race. “If you want to know all about Andy Warhol, just look at the surface; of my paintings and films and me, and there I am. There’s nothing behind it.” (Andy Warhol) This seems to satisfy most people. Digging a little deeper we have the unspoken, but recurrent, theme of solving Ohio’s (and the nation’s) substance abuse and addiction problem – to solve a problem requires actually recognizing and admitting there is one! Analysis can’t disregard the 1%, 99% dichotomy that is America. Not included in the economic statistic of 1%, but considered as such by the SCOTUS (Citizen United ascribes personhood), would be corporate accountability, which deals with enormous sums of electronically available wealth. Recent revelations, disclosed with the Paul Manafort trial, reveal corporate eagerness to make jumbo loans (and indebtedness) to those who travel in the upper echelons of the 1%. Locally we find the 7-24-18 Newark Advocate headlining Park National announces increased income for quarter, year. The corporate person’s accountability of assets and debits is impeccable. Can as much be said for the human persons charged with running the corporate entity? ““We continue to focus on long-term plans to fuel and sustain loan growth and strong overall performance,” Park CEO David Trautman said.”” “Park National Corporation had $7.5 billion in total assets, as of June 30.” Goldberg’s double standard is rooted in a single fundamental economic standard – a bank’s assets primarily consist of the loans it has extended, the money it is owed, the interest and fees it collects. Even the POTUS mouths support for suing the enablers of addiction. What about the enablers of debt? To quote Abrams: “it’s hard for people to believe that change happens.”

The Man Who Never Returned

November 11, 2015

Old MTA song about a poor fellow (Charlie) who boarded the metro train in Boston with enough money in pocket to pay his fare only to learn that the fare had increased while he was in transit (kinda like the price of gas going up 20% while grocery shopping. Should have bought it before.).  “When he got there the conductor told him, “One more nickel.” Charlie could not get off that train.” The song is also known as “Charlie on the MTA” by Jacqueline Steiner and Bess Lomax Hawes, 1949. The chorus, that is repeated while the story is told, ends with “He may ride forever ‘neath the streets of Boston. He’s the man who never returned.” Analysis finds this to be an unforeseen outcome of pay to ride while on board. Much as pay to stay has unforeseen pitfalls. Jessie Balmert (“ACLU: Don’t charge Ohioans for jail stays” 11-9-15, Gannett) covers a report released by the ACLU on county lock ups charging incarcerated inmates for their stay. Reuters gives a different perspective in “Ohio pay-to-stay prisons saddle poor inmates with debt: ACLU” (11-9-15) by Kim Palmer. Though Balmert’s headline admonition appears to evoke “Spare the rod” sentiments, Palmer’s report has better math. Balmert states “The Licking County jail assesses a $10 initial booking fee and a daily fee of $60, according to the report. The jail where Mahoney stayed in Marion County has one of the highest fees in the state: a $100 booking fee and $50 per day. That amounts to $1,600 for a 30-day sentence.” Even Karl Rove would have to admit that the same stay in the Licking County lock up would cost the inmate another $210. Where’s someone who has committed petty theft for monetary gain supposed to come up with that kind of cash? Unlike Balmert, Palmer actually quotes from the report (maybe even read it): “”Pay-to-stay jail fees are the next generation of unending debts that seek to tether low-income people to the criminal justice system,” the report states. “These fees are insidious: loading formerly incarcerated people with increasing amounts of debt make it nearly impossible for even the most well-meaning person to become a productive member of society.”” According to Palmer, 40 of Ohio’s 75 counties charge for incarceration. If Licking County were in Louisiana, failure to pay the 30 day lock up charge would result in, you guessed it, further incarceration (“Poor old Charlie!”). Some states further incarcerate those failing to pay fees and costs associated with their convictions/incarceration (“Did he ever return?”). In the spirit of “new” journalism, Balmert attempts to present “the other side” with: ““It’s unfortunate that we have people in any economic situation that are committing crimes,” said Robert Cornwell, executive director of the Buckeye State Sheriffs’ Association. “But there is a cost to that.”” China is way ahead of the executive director on that one. With capital punishment cases, the kin of the deceased are presented with the bullet and a bill for the cost of execution. A Kafkaesque speculation would be the eventual fee and charge for the cost of execution levied on the estates and survivors of those subjected to capital punishment here in the U.S. Failure to pay in Louisiana (and elsewhere) would rekindle the cycle all over again. Will the circle be unbroken?

Curiouser And Curiouser

October 27, 2015

The October 27, 2015 online Newark Advocate staff headlines “Park National reports income jumps nearly 10 percent”. “Park National Corp. announced net income for the third quarter was more than $20 million, an increase of nearly 10 percent compared to the same period in 2014.” Yadda, yadda, yadda. “The corporation’s net income for the year, through Sept. 30, was $60.1 million, compared to $59.7 million for the first nine months of last year.” More yadda. “The Park National Bank loan portfolio expanded during the third quarter. Loans outstanding on Sept. 30, were $4.96 billion, compared to $4.86 billion on June 30, an increase of $100 million, or an annualized 8.19 percent. Loan growth during the quarter increased across all loan categories, including mortgage loan growth of $10 million, commercial loan growth of $70 million and consumer loan growth of $20 million.” Readers cognizant of previous posts will be mindful to note that for a bank, outstanding loans are considered as assets (sources of income). The Advocate staff writes: “Total assets for Park National Bank were $7.2 billion on Sept. 30, an increase from $6.9 billion the previous year.” Analysis wrote all that in order to consider what the Christian Science Monitor came out with on the same day in an article by Husna Haq entitled “Bill Gates just endorsed socialism, sort of: A boost for Bernie Sanders?”. Though the bulk of the article is about America’s relation to socialism (both as policy and as linguistic term) broken down into demographics and history, Haq does more than use Bill Gates as a teaser: “In an interview with Atlantic that made headlines across the Internet, the former Microsoft CEO-turned philanthropist argued that “the private sector is in general inept” as a tool to manage climate change because “there’s no fortune to be made,” and that the only solution lies with government. Governments, he said, must dramatically increase spending on research and development to combat climate change. Private companies should play a supporting role by paying the costs of rolling out those technologies. “Yes, the government will be somewhat inept,” Mr. Gates said. “But the private sector is in general inept. How many companies do venture capitalists invest in that go poorly? By far most of them.”” Analysis finds this curious. The ONLY proposal for revenue enhancement embraced by the two candidates for mayor of Newark is some kind of income tax. But of course, this is not an income tax on the income of the newly created “persons” of corporations (see SCOTUS Citizens United ruling). It would be an income tax on the income of the other “persons” of Newark. Linguistically they appear identical, but somehow, policy-wise, they differ. ‘Nuff said. It is, however, very curious that for something that affects (and effects) us all, Mr. Gates places his trust in government and not private enterprise. The incumbent candidate for mayor of Newark prefers to rely on the private sector when it comes to something that affects (and effects) the residents of his city (like paving the streets). That is, until it comes to generating income, which is a horse of a different color (it would be politically incorrect to say “person of a different color” though it would imply that the income of one “person” can be taxed while that of another “person” cannot).

“O, what a tangled web we weave,

When first we practice to deceive!”

Sir Walter Scott, Marmion (1808), Canto VI, st. 17

Debt

October 24, 2015

A curious report appeared in the international news this week; curious not because of the story but what was said in it. AP’s Vanessa Gera reports “Poles eager to oust pro-market party in vote despite growth” concerning the upcoming Polish elections. The story highlighted the appearance of the Law and Justice Party candidate, Beata Szydlo, before an abandoned factory promising, of course, the return of such jobs if elected. The Law and Justice Party is considered conservative challenging the current rule of the incumbent Prime Minister Ewa Kopacz and her Civic Platform Party (progressive), somewhat vaguely analogous to what we Americans categorize as right and left. The curious part appears in the thumbnail sketches of the two parties given by: “Another Law and Justice victory on Sunday would complete the nation’s shift to a brand of politics that mixes patriotic rhetoric, deeply conservative social values and a desire to use the state to level out economic inequalities. The party promises to reverse an unpopular rise in the retirement age and put more money into the pockets of struggling families with tax breaks, monthly cash bonuses for children under 18 and free medication for people over 75. It also wants to raise taxes on the mostly foreign-owned banks and big supermarkets in Poland and give tax breaks to smaller local businesses and those that adopt Polish technologies.” and “Civic Platform, the pro-business and centrist party that has overseen steady economic growth during its past eight years of rule.” (“When Poland threw off communism in 1989 it moved quickly to embrace free-market policies, with low taxes on corporations and a weak social safety net by European standards. The policies kept down debt and attracted massive foreign investments, bringing prosperity to many, especially in the cities.”), “Part of society is very successful but a smaller part is unsuccessful and still experiences many difficulties in daily life,” said [Dominik] Owczarek, an analyst with the Institute of Public Affairs in Warsaw. Even though the poor and disadvantaged are in a minority, they tend to be highly motivated voters with the power to influence the election outcome, he said.“. How is this possible? Within European politics much of “the right” stretches back through the Fascism of the 1930’s (prevalent throughout Europe), which actually courses even deeper into the 19th century. Its DNA is much more from the ground up, centered in various organized social accumulations meant to claim for themselves what was possessed by royalty or wealth (Communism, “the dictatorship of the people”, was one manifestation). The U.S. definition of this time/experience was more top down, a kind of McCarthyism, with the folks running things, the wealthy industrialists, etc. hiring thugs, Pinkerton’s, police etc. to muscle and force compliance by the social accumulations in upheaval. So the party affiliations the report describes, of progressives versus conservatives, follows accordingly, given the context of European history. Analysis finds curious the contemporary composition of U.S. party affiliation (which can’t be accounted for because it is the soup we swim in). Since the Reagan elections, the “right” has been supported, promoted and empowered by the very populace its policy’s and priorities do NOT promote. The stereotype is of the “left” favoring give-aways — women’s concerns, social programs (retirement or healthcare), unemployment compensation, welfare, children’s nutrition and education programs, etc. The “right” is generally associated with the market, business interest, wealth and property ownership (land, guns, etc.), and religion (fundamental moral perspective). This differs markedly from the parallel situation described by Gera. Ohio is exemplary of the actuality with the legislature, executive and judiciary dominated by the “right” (though it has a rich “worker’s” history). Someone elected these individuals, or should we say, this party. What Mitt Romney inadvertently revealed (that the individuals of almost half this nation have no net worth) doesn’t correspond with his assessment (that this portion votes for a party that will promote its interest. Something the “right” promotes in Poland. Then again, in Poland Mitt would be considered a progressive!). The focus on the stereotype in Mitt’s covertly recorded statement was misplaced, evidenced by who got elected to run things in Ohio (as well as in a slew of other states). The media and pundit emphasis was on the reason for voting aspect when it should have been on the net worth part. Net worth is derived from comparing an economic entity’s (which is a hypothetical) assets (things of market re-saleable value) with liability (debt, what is owed). If Romney had considered the percentage of people in debt rather than with zero or negative net worth, his prognosis may have differed. The majority of the U.S. populace carries some kind of debt. This debt creates a relationship, an interaction between the borrower and lender, the debtor and creditor. Mistakenly, this relationship is stereotyped as a master/slave relationship, especially in terms of Pay Day lenders, Check Cashers, etc. But a more insightful assessment would be a more nuanced description of support and promotion; that is, of debtor supporting and promoting creditor. If a sibling or close friend borrows/lends money then the debtor and creditor have created/forged a social bond within their relationship; that is, until the debt is absolved (after which they don’t need to interact out of necessity). With debt, they MUST interact with each other. This interaction (social exchange) must be civil, courteous, supportive and promotional, especially if it is accelerated by continuous borrowing, etc. At social functions one will always defer to the other, take a feigned (or genuine) interest in the other, promote or support the activities, priorities, policies of the other; all because debt determines this asymmetric relationship. The nature of debt, with its accompanying support and promotion, may have much more to do with the distinction informed by Vanessa Gera’s article. Interest rates for most consumer debt have been historically low for almost 20 years now (large ticket items, home purchases, student loans, even credit card rates). The asymmetric debt relationship, the inability NOT to promote or support the creditor may account more for why the party of big business, of the market and austerity, is continuously voted into the governance of a nation dependent on credit and long term debt (austerity, after all, guarantees that debt payments will continue without disruption). Getting rid of the debt is certainly NOT in such a party’s interest. Prioritizing “getting rid of the debt” is more revealing of the bad conscience (along with the great rhetoric) continued debtor/creditor interaction produces than any Ben Franklin kind of righteous freedom loving virtue.