November 17, 2010

America's New Slave Class

POLITICS - In case you haven't guessed already America's new slave class is the Poor. And to some extent the lower middle class too. Heck, even the mid middle class is looking a bit surly if they have a mortgage hanging over their heads.

Here is why: If a person has so much debt that it restricts their freedom and if banks/government is stripping away their fundamental rights, then they have become de facto slaves.

Ever heard the phrase "renting is for suckas"? Well in the 21st century renting is also for slaves. Or in this case what might properly be called "Neo-Slavery" (slavery through debt and rent).

Its actually not far from historical slavery either. Some people would wrack up some much debt that they would later be "sold into slavery" in an effort to pay off their debts.

But how is this is a new thing? Haven't the poor always been practically slaves any way? (Rather like medieval serfs living on a land owner's property?) Well, yes, the poor have always been rather stuck between a rock and a hard place for centuries and millenia now.

But never before so many NEW slaves all at once, thanks to the recent American Recession (or Great Recession).

What happened with this new era of slavery is really the result of an accident, one that was bound to happen due to bank greed and stupidity. It wasn't that bankers were in a collective effort to turn America's poorest classes into slaves. No, their intent was to make themselves rich and they did it by playing in the stock market.

And normally you'd think "A fool and his money are easily parted" right? Especially with the stock market involved. But no, here's what happened.

#1. The bankers sold their mortgage debts on the stock market and then leveraged it higher than it was actually worth. (Leveraging things higher then they're actually worth is arguably a Ponzi scheme when used on the stock market.)

#2. Stock marketites (They're more termites, because they're a disease that infects the structure of society) gobbled up the stocks, thinking that housing prices would keep going up and therefore they would keep making lots of money.

#3. The economy hit a big road bump in the years following September 11th and home prices collapsed. Stock marketites sold off their stocks in a hurry, leaving the banks with a lot of mortgage debts and nobody willing to buy all the debts. (They tried selling the debts to the Brits, the Arabs, etc, but nobody would buy.)

#4. Investment banks with lots of bad mortgages started shutting down. Panic spread. The banks made the argument that they were "too big to fail" and convinced George W. Bush / the US government to bail them out by borrowing money from the Chinese.

#5. To recoup their losses the banks foreclosed on lots of houses in the USA, but many of the foreclosures were illegal because they didn't do all the paperwork and just "rubberstamped" them without really looking into whether the family who lived in the home was in arrears or not.

Indeed as it turns out millions of Americans had their home foreclosed on them illegally and they are now suing the banks in what is now a backlog of court cases due to illegal seizures/foreclosures. It is these millions of Americans of which I speak of... they are the new slave class.

Their debts (in this case their mortgages) caused the banks to trample on their rights and essentially steal back homes which should not have been foreclosed on in the first place. In the panic following the collapse of a few banks other banks began rubberstamping foreclosures in a hurry, making the problem worse than it really was in their effort to cut their losses.

Like we said earlier, its the result of greed and stupidity.

The thing is however is that the United States' new slave class isn't taking the stripping of their rights away standing down. They're not uneducated serfs from the middle ages who have no access to lawyers.

So there is going to be an economic rollercoaster ride in the USA and its far from over. First the banks took a hit from the bad mortgages, but they're going to take a second hit from lawsuits (and rightly so) as many Americans fight back and get back what was stolen from them.

Because the banks can't just steal all the homes from America's poor and start charging them rent permanently. People will revolt. Especially in America where guns and explosives are too easily available. It won't be anarchy, but there is a lot of upset people out there... starting with the disgruntled Tea Party movement which is two steps away from becoming a domestic terrorist group.

After all who do you blame in this mess? Who are the would-be slave owners? Bankers and Wall Street.

America will never rest under de facto slavery. The American Dream and the pursuit of happiness will live on.

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