creation of a society indebted to creditors. By design?

Stoller: A Debtcropper Society



By Matt Stoller, a blogger-turned Congressional staffer. He was a policy advisor to Rep. Alan Grayson on financial policy issues. Cross posted from New Deal 2.0.


From the Article published at Naked Capitalism  "A lot of people forget that having debt you can’t pay back really sucks. Debt is not just a credit instrument, it is an instrument of political and economic control."


"Today, we are in the midst of creating a second sharecropper society. I first heard the term “slaves to the bank” from a constituent fighting a fraudulent foreclosure.......... we should recognize that what the creditor class wants is what they’ve always wanted: total dominance of our culture." Find the complete Article Here



Stoler makes some very interesting points.  It is very true that creditors have always wanted to your personal finances at stake any time you take a loan.  We are seeing the perfect example now as we go through the foreclosure crisis.  People have always been forced take out loans in there name rather than in a business name or LLC.  This has been the banks way of locking borrowers in for life, regardless of changes in the economy or employment. 

Today we have millions of Americans underwater with there mortgages with little hope of ever having the home regain its original value.  The large too big to fail banks and insurers have already been bailed out and were given opportunities to "write down" their debt.  The home owner, however, has not only lost their nest egg for retirement, possibly their home, and credit score because the banks are looking to cash in again on this mortgages.  They seem to feel entitled to treat borrows with contempt because they have punitive powers that will take away the rights of citizens. 

What would a creditor do if they had take a major loss because of an economic downturn?  Consider something other than the usual response of milking tax payers to pay their debt.  They would file bankruptcy and restructure, hold their head high, be treated as responsible business people who just hit a rough patch.  The would not be shamed or berated by the media, politicians or the public.  They would likely survive the downturn with out losing any of their personal assets.  Donald Trump has filed bankruptcy for his businesses on more than one occasion but we never hear any say he is "deadbeat" or that he brought it on himself by "buying what he couldn't afford". 

Read more on  how lenders manipulated social views so much that people have been brainwashed into thinking it is much more shameful to default on your home loan than it is to default on a loan or your business.


Young people and what only cynics might call ‘homeowners’ have no choice but to jump on the treadmill of debt, as debt croppers. The goal is not to have them pay off their debts, but to owe forever. Whatever a debt cropper owes, a wealthy creditor owns. And as a bonus, the heavier the debt burden of American citizenry, the less able we are able to organize and claim our democratic rights as citizens. Debt croppers don’t start companies and innovate, they don’t take chances, and they don’t claim their political rights. Think about this when you hear the calls from ex-Morgan Stanley banker and current World Bank President Robert Zoellick and his nebulous mutterings pining for the gold standard. Or when you hear Warren Buffett partner Charlie Munger talk about how the bailouts of the wealthy were patriotic, but we mustn’t bail out homeowners for fear of ‘moral hazard’. Or when you hear Pete Peterson Foundation President and former Comptroller General David Walker yearn nostalgically for debtor’s prisons.
Unclogging our constipated economy is not a complex problem — we must simply wipe out the bad debt that cannot be paid back. The complexity of the problem lies in the politics. Debt croppers have no power, except to stop paying their debts. The constituents I worked with on a fraudulent foreclosure eventually did just that. She and her husband, unshackled by panic, began rebuilding their lives, throwing away their indentured servitude to the bank that abused them. They found their dignity, and used the court system to claim their rights as citizens. They fought the man, successfully, and wiped out their debt. And that is a very scary threat to the creditor class, perhaps the only thing they are really scared of.


I agree with Stoler that unclogging the economy is not complex.  But the complexity is no greater in the political forum.  The answer is the same.  Politicians are mostly part of the creditor class.  They know the answer and they know the right thing to do.  However, most people don't end up in politics because they like to give away power.  Therefore we are hearing the palavering of our representatives who are too cowardly and too scared to stand up to the TOO BIG TO FAIL BANKS.  The politicians have known for years that money rules the world.  They have never been shy about being bought and paid for either. 

There may be some hope for the average citizen being held accountable for what has become a ridiculous debt burden.  A burden that has been paid for by the US Taxpayer once already. But the banks are expecting to get paid a second and a third time for the same debt .  The bailout was their life line and they chose to throw it in the face of the nation. 

Read more on what banks don't want you to know here. 


The hope lies with the court judges as they go over case after case of bank maleficence.  We will see if they sell out the American Citizens just like Congress. 
The Boston Tea Party