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March 06, 2005



Dear Abigail,

I thought your readers might find some historical context interesting. Many thousand, perhaps millions were sent to America under horiffic conditions to pay off their - or their parents - debts in a form of slavery as 'indentured servants'. We know know that most did not survive until they became free men or women.

Take a little time and read an account by a primary source.. One of the few who made the journey and was able to tell the tale (most indentured servants were illiterate)

Note that conditions such as these in Europe and Asia, particularly in the lands controlled by the British Empire - like India under the British East Asia Company were part of the complex reasons for the American Revolution.

Gottlieb Mittelberger, On the Misfortune of Indentured
Servants (1754)



Our founders were rightfully afraid that corporations had the potential, if allowed free reign, to destroy America.

This is what is happening...

We must stop seeing corporations as people. This huge mistake is at the core of our problem. Pathological narcissistic greed is ruining this country.


Apparently I don't understand economics. Or our bankruptcy laws anyway. Could you further explain how the change in change in bankruptcy laws would only result in a "temporary profit spike for credit card insurers?" Would not the creation of "a whole new underclass of indentured servants" be quite profitable? How would the change in bankruptcy laws increase "the internecine competition between credit card issuers?" And are you saying that the change in bankruptcy laws would allow more people to qualify for credit cards?


Kevin Drum's blog answered some of my questions:

In a normally functioning market there's at least a small incentive to limit loans to these high-risk customers, namely the possibility that they might go bankrupt, and the bankruptcy bill before Congress is a brazen attempt to remove even that small but annoying incentive to act responsibly.

Credit card companies want the ability to make risky loans, but they also want federal protection that protects them from bearing the risk that goes along with making those loans.


Seems like the credit card corporations want protection from the same sort of risks that they're fighting so hard to deny everybody else.

Just think of this bankruptcy reform passing in the context of the eventual privatization of Social Security. Then people wouldn't have to worry about investing their retirement money badly, because it would all have been taken by the credit card companies.

tom f

RE: the generous homestead laws in Florida, I don't think it was a coincidence that WorldCom's CFO built himself a gigantic mansion in Florida despite the fact that his office was in Mississippi. Not that everyone in Florida's a crook, obviously, but if your looking to lend to or invest in a business you might take the CEO's primary residence into account---I once had to evaluate a potential purchase of a loan portfolio from a failed S&L that had all of its branches and operating units in the Northeast, but (otherwise inexplicably) had its "executive offices" in Florida.

Paul Gowder

Hear hear! Your comments on credit rates + bankruptcy as insurance for loss of the ability to pay are extremely insightful, and, I think, novel. It's a "meme" (oh, how I hate that term) that could bear spreading, as it usefully counteracts the propaganda that bankruptcy is costing everyone more money. "Yea, but it protects everyone, too." (Notwithstanding the complete lack of evidence that interest rates will go down after/if this bill gets rammed through.)

It's also good to see some economic analysis being wielded by a fellow liberal.

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