Friday, March 11, 2005


I flirted with and skirted the bankruptcy system for years, and I have advised other people how to do the same, where possible. One of the reasons I could give advice was that I worked for credit card companies while I was in college. For a while, I was quite happy engaging in the sorts of bill collector tactics (like calling the neighbors and leaving a message) that they had to make illegal.

Thanks to the new law, over the medium term: maybe before the 2008 election, but certainly by 2012, the credit card companies, the electronics industry, the computer industy, and the entertainment industry, just to name easy examples, will discover that people will stop going into debt to buy this year's model when last year's model still works well enough. It will be too much risk to be that cool.

There will be fewer bankruptcies, far less debt, and far far less profits for the credit card companies. All good.

I am not as worried or as outraged about the mechanics of bankruptcy reform as most people.

The real outrage is in this hidden class component.

People from families who remember what it means to be poor always worry about the "stigma of bankruptcy."

But easy bankruptcy has always been a part of the United States. In early days, you came to America to avoid debtor's prison, then you literally left your debts behind by leaving town. There were thousands of other towns out west. At least that's the urban experience. I don't know if the farm experience was the same, but when you read about the lives of 19th century Americans, these farm families sure seemed to move around --- a lot.

It has always been easy for wealthy people to rearrange their debts so they don't have to declare bankruptcy. No one is better at this (at least publicly) than Donald Trump. (Maybe Thomas Jefferson). It is expected that Thomas or the Donald be allowed to do this. The new bankruptcy laws change nothing as it pertains to wealthy people seeking bankruptcy protection. What would Kenny Boy Lay do?

As more and more people escape poverty, and rise to the middle class, they come in contact with these people, they see their lifestyles, they get educated by the same business professors, and they wonder why they cannot treat their own business affairs in the same way. They don't understand why they should carry the moral stigma of bankruptcy when the Donald doesn't have to.

This revised bankruptcy law is a slap-down, a reminder to the middle class that the rich are different, and don't you dare go thinking otherwise. Just be grateful that we allow you some access to the bankruptcy courts, and we don't just beat you in the manner in which you deserve.

Paul Krugman refers to this as a desire for a "Peon Society," but as he describes this, he misstates the issue. It is not the economics of never being out of debt that these people are interested in, but the psychology of always considering yourself unworthy.

Unworthy of bankruptcy protection, unworthy of safe working conditions, unworthy of modern health care, unworthy of decent retirement, unworthy to ask others to pay their fair share, unworthy of freedom from fear.

Just Sinners In The Hands of An Angry God. And maybe you aren't even worthy of approaching Him.

What's The Matter With Kansas? It isn't the bait-and-switch that we liberals talk about (Kansas elects conservatives to protect them from gay marriage and abortion, but that proves impossible to do, so they wind up taking away your social security instead). It's the battle where the ways of thinking where we are made to feel less than are fighting the ways of thinking where we are made to feel the same as, are made to feel that God wants us to be happy, joyous and free, to be all we can.

To put it another way, too much freedom gives you vertigo, makes you want to lie down, and let other people, people "better" than you, take care of it.

To put it in Peter Townsend's way --- "No Easy Way To Be Free."