Welcome Katherine Porter (ForeclosureFraud) and Host Masaccio (FDL)

[As a courtesy to our guests, please keep comments to the book and be respectful of dissenting opinions. Please take other conversations to a previous thread. - bev]

Broke: How Debt Bankrupts the Middle Class

Katherine Porter’s book, Broke: How Debt Bankrupts the Middle Class, is a group of essays based on the 2007 Consumer Bankruptcy Project. The 2007 CBP collected basic information on substantially all Chapter 7 (liquidation) and Chapter 13 (partial repayment plans) cases filed for five consecutive weeks in early 2007, and selected 1000 cases per week for detailed study. The researchers collected data from a) the petitions filed by the debtors, which contain enormous detail about their financial condition; b) other court records; c) questionnaires from about half of the cases; and d) interviews of about 20% of the filers. That is a wonderful cross-section of Americans whose finances were destroyed just before the Great Crash.

Each chapter explores a single aspect of this study. The principal investigators on the study are experts in law, economics, political science, psychology, and sociology. The rich data provides fascinating insights into the causes and effects of bankruptcy. It confirms some expectations and raises fascinating issues that could not have surfaced in a less complete investigation. I practiced bankruptcy law for 25 years, representing corporate and individual debtors and creditors, and bankruptcy trustees, and I can say that most of the statements about individual debtors ring true to me.

Porter describes the book In Chapter 1, which you can read here.

Here are some of the interesting findings:

1. Bankruptcy is a middle class phenomenon, contrary to the myth that it is primarily a way for the poor to get rid of debts. Almost all filers are, or were within two years of filing, members of the middle class, by income, home ownership, education or job.

2. People who file bankruptcy are in deep financial distress. For example, the median bankruptcy filer has a negative net worth. In contrast, the median family in financial distress according to the Federal Reserve Board’s Survey of Consumer Finances has a slightly positive net worth. Of course, both are substantially below the median net worth of all families, which was $120,600 in the 2007 Survey.

3. It is not likely that bankruptcy filers could work their way out of debt. The median unsecured debt in the CBP study was $33,387, while the median monthly income was $2,266; it would take 15 months of income to pay the debt, not counting additional interest. Other debt, including car loans and mortgage payments just add to that figure. Bankruptcy is truly the last resort.

4. People used to think home ownership and education were the tickets to middle class status. Now both are horrible financial problems for many people. Data from the CBP shows that for families where the cost of home ownership exceeded 30% of income, the average loan to value ratio of the home was 145%. Even for families whose cost of home ownership was less than 30%, the average house had no equity.

As to education, Porter shows that attending college without attaining a four year degree is a losing proposition for those who have to borrow. Bankruptcy filers with some college education have debt to income ratios similar to people with only a high school education. Recent headlines give some idea of the student loan problem, as total student loan debt has reached the $1 trillion level. This is non-dischargeable debt, meaning that vast numbers of people have handicapped themselves trying to get a place in the middle class.

5. About 14% of the bankruptcy cases in the CBP are filed by people who were self-employed. We are bombarded with stories about self-made people, but we never hear about the failures. By most measures, these are at the bottom of the pile financially. Most of them borrowed on credit cards, meaning that their interest rates are very high, hurting their prospects for profitable self-employment. Many have borrowed from family, and from retirement accounts which are exempt from claims of creditors. Bankruptcy hurts them very badly.

6. Financial problems cause tremendous emotional strain. The data from the CBP says that women suffer more emotional stress than men, but both are hurt. Many marriages cannot take the stress, and break-ups lead to further financial problems even after bankruptcy as they establish two households. Losing a home is especially stressful. It is an admission of utter failure, and it has terrible impact on children.

7. Perhaps the most surprising finding is that more African-Americans file Chapter 13 than the population as a whole. The authors of Chapter 10 say that this is because their lawyers steer them to Chapter 13 even when they might be better off in Chapter 7. This will require further study.

8. At the same time debt was increasing, wages were stagnant, and people maintained their consumption patterns by borrowing. In 2005, the Bankruptcy Code was amended to make it more difficult, time-consuming and costly to file. After people decided to file, they remained stressed for a much longer time period, adding to the misery. Simultaneously, the safety net was slashed. The CPB data was gathered before the Great Crash, so we can only assume things are worse now.

9. Once government strictly regulated lending, both for home loans and unsecured debt, and provided strong support for education, especially at state universities and community colleges. Social goods were provided through employment, such as support for health insurance and defined-benefit pensions. All that is gone now, replaced by policies that force each family to operate all by itself.

Porter and her collaborators offer suggestions for changes that might make minor differences. But the message of Broke is simple: middle class life is harder for people to attain and maintain.

221 Responses to “FDL Book Salon Welcomes Katherine Porter, Broke: How Debt Bankrupts the Middle Class”

BevW March 25th, 2012 at 1:48 pm

Katie, Welcome to the Lake.

Masaccio, Thank you for Hosting today’s Book Salon.

masaccio March 25th, 2012 at 1:56 pm

Good to be here. Welcome, Katie.

masaccio March 25th, 2012 at 2:00 pm

Katie, your book is based on a study of bankruptcy data called the Consumer Bankruptcy Project, which is the latest of a series of similar studies. Could you explain how the questionnaires and the interviews were prepared?

dakine01 March 25th, 2012 at 2:01 pm

Good afternoon Katherine and welcome to FDL this afternoon. Good afternoon masaccio!

Katherine, I have not had an opportunity to read the book (other than the first chapter) so forgive me if you address this, but why is it so expensive to declare bankruptcy? And why does having a lawyer mean so much to the process?

Lawyers are expensive and for someone already in the massive financial hole that it appears most bankruptcy petitioners are in, it seems counter-intuitive to have to spend for the lawyer yet it seems obvious that those trying to do-it-themselves are given no respect at all. Is it to punish them for not having the money for a lawyer?

PeasantParty March 25th, 2012 at 2:02 pm

Welcome and thank you for your time here. Looking forward to hearing more about your book.

Katherine Porter March 25th, 2012 at 2:06 pm
In response to dakine01 @ 4

The financial expense of filing bankruptcy includes two costs–filing fees payable to a court and attorneys fees. The latter in particular have gone way up in recent years, primarily in response to Congress amending the bankruptcy laws in 2005. Typical attorneys fees for a chapter 7 case are about $1500, and for chapter 13 about $3,000. I think the fees are so high because the law is so complex. We have a high-volume system for people in financial trouble but it has bells and whistles and twists and turns that make it an incredible individualized, complex system. That drives the amount of time it takes a lawyer to represent someone in filing.

Katherine Porter March 25th, 2012 at 2:06 pm
In response to PeasantParty @ 5

Thank you! I’m glad to have figured out how to join you all today.

Tammany Tiger March 25th, 2012 at 2:07 pm

I have a question about the Affordable Care Act. To what extent, if any, does the law reduce the probability that a family will be bankrupted by medical bills? I don’t see very much in the law that addresses co-pays, deductibles, and denied claims that can quickly eat up a family’s net worth.

Katherine Porter March 25th, 2012 at 2:08 pm
In response to masaccio @ 3

The Consumer Bankruptcy Project in 2007 gathered data in 3 ways. First, we sent written surveys to people who had filed bankruptcy. Those asked about demographic information and reasons for filing bankruptcy. Second, we collected financial data from each debtor’s public bankruptcy court records. Third, we conducted in-depth telephone interviews with people. The phone interview had different modules that were deployed depending on someone’s situation, including modules on medical problems, homeownership, and small business. The final sample, which comes from across the nation, consists of over 2,000 bankruptcy cases, split between chapter 7 and chapter 13, the two forms of consumer bankruptcy.

Tammany Tiger March 25th, 2012 at 2:09 pm

One of the cases I remember well from Con Law class in law school involved filing fees. The courts ruled that bankruptcy is not a “fundamental right,” which meant in effect that a person could be too broke to file for bankruptcy.

masaccio March 25th, 2012 at 2:10 pm

I would add that many people who file get to their lawyers before they run out of money. The attorneys fees and the cost of filing often come out of money that otherwise would go to creditors.

A lot of bankruptcy lawyers don’t like to file cases for people without jobs, because after you file, you can’t file again for 8 years. If you get into medical problems for lack of health insurance while you are looking for a job, you are in deep trouble.

If you have a job, that next paycheck can cover the costs and expenses of filing instead of going to creditors.

Katherine Porter March 25th, 2012 at 2:11 pm
In response to tammanytiger @ 8

Great question about the Affordable Care Act and bankruptcy. Nobody knows for sure, but we do know that many of the people who file bankruptcy in the wake of an illness or injury actually are insured. Their financial problems come from not being able to afford their deductible, having gaps in their insurance–and most importantly, from loss of income due to illness or injury. The Affordable Care Act should help reduce the bankruptcies among the uninsured but it isn’t clear to me it is going to help with those job/income problems that occur in tandem with medical problems.

masaccio March 25th, 2012 at 2:11 pm

Can you tell us who designed the questionnaire and the interview, and what their goals were?

Katherine Porter March 25th, 2012 at 2:13 pm
In response to tammanytiger @ 10

Actually in 2005 with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act, Congress did help out the lowest-income families in terms of filing bankruptcy. One can now apply to a court to file in forma pauperis, and have the court waive the filing fees. Those are about $300, and while that certainly helps people, that same law made bankruptcy more complex–resulting in doubling attorneys fees and making it harder for people who file without a lawyer to get relief. On net effect, I think we were better off with everyone having to pay the fees, but lower attorneys fees and a simpler law.

Michael Bovee March 25th, 2012 at 2:13 pm

In your research for the book, were you able to compile any meaningful data on 13 filings that were later converted to chapter 7′S? If so, was there enough data to provide a meaningful statistic of how many 13′s were not completed due to the conversion to 7′s?

BooRadley March 25th, 2012 at 2:13 pm
In response to BevW @ 1

x2

Katherine Porter March 25th, 2012 at 2:15 pm
In response to masaccio @ 13

The questionnaire and interview were jointly designed by the team of principal investigators, which included people from several universities (Illinois, Iowa, Harvard, UNC, Michigan, Ohio Univ.) and from several disciplines, including law, medicine, and sociology. The major goal was to learn more about who files bankruptcy and why—remarkably, our court system does NOT collect even the simplest pieces of information that might illuminate those critical policy questions. The only way we know, for example, about the incredible rise in bankruptcy among people aged 70 and older, is because of the work of the Consumer Bankruptcy Project. The government continues to say that the demographic characteristics of people in bankruptcy are not relevant to the administration of justice. I strongly disagree!

Katherine Porter March 25th, 2012 at 2:17 pm
In response to Michael Bovee @ 15

Conversions to chapter 7 from chapter 13 are relatively uncommon. About 1/3 of chapter 13 cases end in completion of a repayment plan and a discharge. Of the remaining 2/3, most are dismissed. I think most studies find that about 10%, maybe somewhat more, of chapter 13 cases end in chapter 7 conversion. My own, opinionated view is that nearly all chapter 13s that are not going to complete their chapter 13 plan should convert. I think those families would be much better off in chapter 7 where they can quickly discharge their debts than dropping out of bankruptcy altogether.

Katherine Porter March 25th, 2012 at 2:19 pm
In response to masaccio @ 11

Research that I’ve done with Professor Ronald Mann suggests not so much that they get to attorneys before they’ve run out of money, but rather than people actually SAVE up to file bankruptcy. Usually this comes from a tax refund, which is why we see a spike in filings in late February, March, and early April. You can download that paper, Saving Up for Bankruptcy, for free here. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1540216

masaccio March 25th, 2012 at 2:22 pm

Chapter 9 in the book looks at the difficulty of filling out the forms for bankruptcy. The author, Angela Littwin, finds that pro se filers, those without lawyers, had much worse outcomes, especially in Chapter 13. As a former bankruptcy lawyer, I think the benefit from hiring a lawyer exceeds the cost, but I’m probably prejudiced.

It does seem that in an age of ubiquitous computers, there should be an simple way to provide the information needed to process a consumer case, in either Chapter. People can do their taxes with Turbo-Tax, and that is a lot more complicated than a bankruptcy should be.

Katherine Porter March 25th, 2012 at 2:22 pm
In response to dakine01 @ 4

You also asked about how people fare without a lawyer. The answer is mixed. Angela Littwin’s chapter in Broke takes a careful look at pro se filings–people who do not have a lawyer. She finds that for chapter 7 people do okay; above 90% get a discharge. They don’t do as well as with lawyers, but rough justice—they survive. In chapter 13, the story is awful. The percentage of people who file chapter 13 with a lawyer who will complete their repayment plan and get to the end of their bankruptcy to discharge their debt is LESS THAN ZERO. It is so small, we can’t even measure it. I think this is a serious policy problem. We built a legal system that lets people come in without a lawyer but they stand no chance of getting the relief.

DWBartoo March 25th, 2012 at 2:22 pm

Thank you Katherine for joining us.

Masaccio, it is wonderful to have you as host, this evening.

DW

mswinkle March 25th, 2012 at 2:23 pm

So if you can only afford the lower fee you still have the problem that system is now complex and without a lawyer hard to get relief. So assuming you are not able to afford a lawyer, and do not have the skills needed to navigate the system and get relief then what? What happens to those people?

Katherine Porter March 25th, 2012 at 2:24 pm
In response to masaccio @ 20

I agree that consumer bankruptcy should be simpler. The difficulty is that the LAW is complex, and this means that the PROCESS to file is also complex. I think that the key is to simplify the law, and then a simpler process can follow. There are plans to redesign the bankruptcy forms to create special consumer forms–designed to be easier for people to use without a lawyer. Guess what, the simpler forms are over 100 pages long!

James McGuire March 25th, 2012 at 2:24 pm

Where a family is currently in Chapter13 with a fixed payment plan and a creditor falsely files incorrect information, do the attorneys hired at the initiation of the suit have a duty? What if that attorney asks for additional fee!

Katherine Porter March 25th, 2012 at 2:25 pm
In response to mswinkle @ 23

The sad story, as reported by Angela Littwin in chapter 10 of Broke, is that many people who file without a lawyer end up exiting bankruptcy without any debt relief. They will have gotten a few weeks or even a few months of protection from foreclosure or creditor dunning because of the bankruptcy, but they do not discharge their debt. The problem is particularly acute for people who file chapter 13–the chapter that typically attracts people facing foreclosure.

masaccio March 25th, 2012 at 2:25 pm

Interesting. The book points out that it can take several weeks to gather the paperwork you need to file, which is another opportunity to save up the fee.

Katherine Porter March 25th, 2012 at 2:27 pm
In response to James McGuire @ 25

This sounds suspiciously like a real-life situation so I am going to avoid practicing law on FDL. But the general answer is that some attorney agreements provide for a flat fee for basic services, and then additional fees for other kinds of actions that occur in some, but not all, cases. This is a kind of de-bundling of legal services, and it is somewhat controversial. The idea is that you make the basic fee lower–improving access to more people–and then charge add-on fees for complex stuff. The problems are that people may not understand this arrangement and they may not have any money to pay for the additional work. The result can be people ending up without a lawyer for the very hardest, most crucial parts of their cases.

PeasantParty March 25th, 2012 at 2:28 pm

Katherine,

I would like to know which sector/industry of the corporate entities is the hardest to work with in bankruptcy filings? I’m asking not only from your book research, but your knowledge from all the years working in industry. We here at FDL have been taking a very close look at things and our Capitalist society in order to help people understand what has caused us such mountainous problems.

Katherine Porter March 25th, 2012 at 2:29 pm
In response to masaccio @ 27

Yes, bankruptcy does not happen overnight. We often hear politicians talk about how filing bankruptcy is just “walking away from your debts” but the process is more difficult than that. The other point here is that most bankruptcy filings are NOT emergencies. The financial problems have been brewing for a while, and people take a while to get the paperwork and money together for a case. In Broke, I report that over 40% of families seriously struggled with their debts for more than 2 years before filing bankruptcy. Hard to square that with some politician’s statements about “bankruptcies of convenience.”

mswinkle March 25th, 2012 at 2:31 pm

so they still have the debt but if they have no money and no assets to pay creditors what legally can happen to them?

I am not sure but I don’t think we have debtor prison anymore

greenwarrior March 25th, 2012 at 2:32 pm

what is the basic difference between filing for chapter 7 and filing for ch 13? advantages, disadvantages?

Tammany Tiger March 25th, 2012 at 2:33 pm

A friend of mine often points out that it is much easier for a person to get relief in bankruptcy court on a mortgage for a second home held for investment than for the home he or she actually lives in.

And don’t get me started on corporations who use bankruptcy to walk away from pension and health-care obligations.

Katherine Porter March 25th, 2012 at 2:33 pm
In response to PeasantParty @ 29

PeasantParty– I see two ways to read your question, and perhaps you can help clarify what you are interested in understanding. In the consumer side, mortgage creditors are by far and away the worst. Some of that is the law gives so many extra protections to home mortgage creditors in bankruptcy, they really have the upper hand. The other problem is that mortgage servicing is a huge mess–something that we saw back in 2007 and earlier in bankruptcy. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1027961

In terms of industries generally in bankruptcy, there are some industries where bankruptcy does not offer very many tools. Banks have been the classic exception from bankruptcy for a long time, but the exceptionalism has gotten even worse. One big change is that most companies entering bankruptcy have so much more secured debt–and less “trade” debt (unsecured debt)–than in the past that the secured creditor really controls the case. Instead of the “Debtor in Possession” running the case, as the law states, Prof. Jay Westbrook and others have written about the “Secured Party in Possession” of the bankruptcy estate.

James McGuire March 25th, 2012 at 2:33 pm

What can a family do to best prepare themselves mentality?

masaccio March 25th, 2012 at 2:34 pm

My experience is the same: people struggle for much too long to stay afloat. We often said that if only they had come to see us earlier, we could have saved a lot of money for people.

Katherine Porter March 25th, 2012 at 2:35 pm
In response to mswinkle @ 31

We don’t technically have debtors’ prisons but actually there has been a resurgence of sending people to jail because of debts. Technically, they are held in contempt of court for failing to follow a court order to pay their creditors. But as a practical matter, they are in jail because they don’t have any money. The Star Tribune had a nice piece about this problem recently: http://www.startribune.com/investigators/95693219.html

In general what happens is that people go back to being dunned. They get phone calls, letters, lawsuits, and threats. And if they do have collateral for loans, like cars and houses, those are repossessed/foreclosed.

DWBartoo March 25th, 2012 at 2:35 pm

This gets rather directly to the role that money plays in our legal system, of course, Katherine … As, in far too many instances, not merely bankruptcy, very many people simply cannot afford legal representation of the quality necessary, which fact impacts everyone in our society … Although this “problem” or fundamental defect in our legal system, is not really central to your concerns, it is a most serious issue that must be addressed, eventually, especially as, now, we see a two-tier system of “justice” being created, the wealthy receiving very different access and results than the majority, the Rule of Law being very perverted … even as it impacts the recent “Settlement” of high level Bank fraud relating to home foreclosures.

Do you or any of the other contributors to your book have any thoughts about this larger legal dilemma?

DW

PeasantParty March 25th, 2012 at 2:37 pm

I think you answered my question. If I am understanding correctly that mortgages/banks are the hardest to work with instead of maybe Hospitals or Student Loan/Government debt.

Katherine Porter March 25th, 2012 at 2:38 pm
In response to James McGuire @ 35

This is a great question. We need to do more research on debtors’ experiences to answer it fully, but I’d like to respond to your question by sharing a quote from one of the interviews that I did. This family filed chapter 13, it lasted about six months, and then the bankruptcy trustee dismissed their case because the family had lost income and could not make their required repayments. Here is the family’s response to our question: “What advice would you have for someone considering bankruptcy?”

Be prepared for a rocky road. It’s not an easy thing to go through. It’s a longer process than what we thought it would be and there is [sic] unbelievable amounts of paperwork. We had creditors telling us that bankruptcy wouldn’t solve our problems. . . . We wanted to believe it would help us, but maybe they were telling us the truth

Mauimom March 25th, 2012 at 2:40 pm
In response to masaccio @ 36

My experience is the same: people struggle for much too long to stay afloat. We often said that if only they had come to see us earlier, we could have saved a lot of money for people.

A subset of this situation seems to me the folks who realize that they should just walk away from their underwater mortgage. Unfortunately, they pay and pay and pay, out of belief that it’s the “moral” thing to do.

They get screwed.

mswinkle March 25th, 2012 at 2:40 pm

The reality is the way our monetary system works there is always more debt owed than there is ‘debt money” circulating to pay for it. So in reality X amount of people will find that they owe more debt than they have “debt money” to pay for it.

The solution offered for this is bankruptcy. But if it is a rigged game from the outset I am wondering if there are some other legal avenues one could pursue? i don’t know just trying to think outside the box, as working within the box sure seems stacked against those with debt.

Katherine Porter March 25th, 2012 at 2:41 pm
In response to PeasantParty @ 39

Hospitals and doctors’ offices have a nasty reputation for being aggressive in pursuing lawsuits and strong collection tactics. People say they are more fearsome than the IRS, at least for low- to moderate-income families. But inside bankruptcy, medical debt is easily discharged.

Student loans are another story. Such debt is usually not dischargeable, and that is a major policy problem that we need to address in my opinion. There is some recent research though that suggests that part of the problem is that lawyers actually think it is nearly impossible to discharge student loans, when in fact, people who try often succeed. We may partly have a public relations problem among bankruptcy attorneys with regard to student loan debt, and that then trickles out to be the public’s understanding. But to be clear, Congress really does not want to let people off the hook for student loans via bankruptcy.

Mauimom March 25th, 2012 at 2:42 pm

Welcom, Ms. Porter, and thanks masaccio for hosting.

Ms. Porter, I spend a lot of time following student debt, particularly that of law students. Do you think there’s ANY hope of the law getting set back to what it was before the “improvements” [from the creditors' point of view] so that educational debts will be able to be discharged in bankruptcy?

On edit: I see by your response to the previous question that we’re thinking along the same lines.

The only thing that gives me ANY hope in this area is the articles I’m starting to see about how the crushing student debt affects other areas — #1 being the housing market. Kids have to devote so much of their resources to paying off their debt that they can’t save up to buy a house. Boomers figuring they could downsize and move to FL can’t sell their place. And on and on.

I’d hope that as not just STUDENTS, but their parents, grandparents and the folks who’d hope to sell to them figure out how student debt is killing them, they’ll be broader calls for reform. I know there are some proposals about forgiving a percentage of debt if a kid has made some significant # of payments. For lawyers, there’s also the “go work for the poor and we’ll forgive some of your debt” program, but there aren’t an adequate number of those jobs.

eCAHNomics March 25th, 2012 at 2:44 pm
In response to tammanytiger @ 10

What happens to people who are too broke to file?

Katherine Porter March 25th, 2012 at 2:45 pm
In response to DWBartoo @ 38

You are right that this is a big-picture problem about legal access and a 2-tier system of justice. I think one answer, and one that I hope we see in the mortgage settlement, is much better data collection on the nature of the problem. So if banks are helping rich people to comply with the settlement–giving a $300,000 write down on a $1 million loan–I want to know that, because I would rather have them to three $100,000 writedowns on $300,000 loans.

I think one response to the big-picture problem is to stop wringing our hands about the lack of funding for Legal Aid and hoping it will get better. Instead, we should try to retool the law itself to make it easier for people to proceed without lawyers. I think about these issues a lot when I write about consumer law generally, including things like foreclosure, unfair and deceptive practices, etc. We need self-executing remedies and other tools that do not rely on providing a consumer with a competent lawyer to vindicate their rights. We just aren’t going to get to that level of legal representation in this country. The UK, by the way, does have such an approach. It is called Judicare, and works kind of like Medicare, in terms of being government paid for legal services.

PeasantParty March 25th, 2012 at 2:46 pm

Thanks! That really helps. I can see that a mortgage loan that ends up being somewhere between 2 to 3 times the actual costs of the home is what the banking industry is fighting for.

James McGuire March 25th, 2012 at 2:46 pm

When should a family finally admit there is a financial crisis in their household.

A loaded question, that you may not be able to answer, or want to answer: will the government ever learn lessons of financial responsibility?

seaglass March 25th, 2012 at 2:47 pm

“Hospitals and doctors’ offices have a nasty reputation for being aggressive in pursuing lawsuits and strong collection tactics. People say they are more fearsome than the IRS, at least for low- to moderate-income families.” Katherine do you have any thoughts on why this might be?

Ludwig March 25th, 2012 at 2:47 pm

So, is the middle class worth it?

eCAHNomics March 25th, 2012 at 2:48 pm

Aren’t laws written by & for lawyers: permanent employment acts, as it were. Isn’t it unlikely that lawyers qua law writers would do anything other than make the law more complicated?

Katherine Porter March 25th, 2012 at 2:49 pm
In response to eCAHNomics @ 45

I want to make an important methodological point before I try to answer this question. It’s really hard to study the group of people that DO NOT file bankruptcy. Why? Because we don’t know how to find them. We find people in bankruptcy by the public court records but tracking down those who are discouraged because they believe the law is too tough, or who cannot afford to file is very difficult. A certain amount of speculation then is necessary to answer your question “What happens to people who are too broke to file?”

The main answer is that they wait and save up for bankruptcy. Instead of filing within a few weeks of seeing a lawyer, they file within six months of seeing a lawyer. For others though, they just endure being dunned by creditors. If they do not have a house or car at risk, the problem is largely psychological—suffering knowing that they are in debt trouble and dealing with harassment. Sometimes creditors garnish wages but usually they just keep on dunning.

mswinkle March 25th, 2012 at 2:50 pm
In response to DWBartoo @ 38

Agree with you. Have also wondered that. You have a right to a fair trial. But if you can not afford legal defense etc how is that a fair trial. As katherine said earlier those that represent themselves often fail to get relief. if that is so then it is proof that it is not fair. Again just trying to think outside the box but would you not be better to try and argue the court proceeding is not fair and therefore can not be used against you.

I know this is a little simplistic but there are a lot of great minds on here and instead of fighting court cases within the parameters of the charges brought maybe we should start looking at the system as a whole and seeing if we can use other legal methods to knock the case down.

Mauimom March 25th, 2012 at 2:52 pm

While this is outside your area of expertise re bankruptcy, maybe you’ve come across it: are you seeing any more “acceptance” by folks of the idea that they should just walk away from their underwater mortgage?

Of course that really only works in a non-recourse state, but even in a recourse one, the creditor has to come after the defaulting debtor. The might be overwhelmed enough to be disinclined.

James McGuire March 25th, 2012 at 2:53 pm

One of the most serious concerns I ask, where the facts are evident of truth and the Judge (not the court) fails to follow law, what is one to do?

masaccio March 25th, 2012 at 2:53 pm
In response to mswinkle @ 42

The CBP collected information about the emotional impact of financial failure on people who filed bankruptcy in early 2007. Do you think that people react differently in the aftermath of the Great Crash, either to the loss of their home or to financial failure generally?

Katherine Porter March 25th, 2012 at 2:54 pm
In response to eCAHNomics @ 51

In a recent paper, called The Pretend Solution, which is about chapter 13 bankruptcy, I argue that lawyers and experts (like myself!) are a major reason why laws end up being too complicated. But I don’t think it is just “permanent employment acts” by lawyers (but I probably think that because I am a lawyer). Instead, I think the problem is that lawyers and experts really want to help people and so they try to be really generous and solve everything and give people lots of tools and empower them and provide a solution for nearly every problem that crops in real life. The result–a system that is so complex that people cannot understand when to use it and cannot afford it, AND EVEN WORSE, it is so complex that we can “pretend” that we built a solution when in fact the system has serious problems. Take HAMP as a counter-example. It was a disaster–but we knew is was a disaster. Why? It didn’t have the buy-in of people like Elizabeth Warren and housing counselors and consumer advocates and they just kept at Treasury until the program was exposed as a failure.

Katherine Porter March 25th, 2012 at 2:56 pm
In response to seaglass @ 49

This is cynical but I think it is because hospitals and doctors really need people to repay their debts to make money, whereas credit card companies and the financial industry has figured out how to make money off people IN financial trouble. They have a card/product that is designed to collect enough upfront costs, fees, etc from even those in trouble. So they are intentionally marketing to people in financial trouble, and they don’t bother to collect too hard at the end. They already earned what I have called their “Bankrupt Profits.”

eCAHNomics March 25th, 2012 at 2:57 pm

If bankruptcy lawyers really want to help people, why don’t they band together & get up a really good website with FAQs, forms, procedures, links to the complications which are supposed to help rather than making it more difficult?

Katherine Porter March 25th, 2012 at 2:59 pm
In response to masaccio @ 56

I think it is too early yet to know if we will see meaningful culture changes in attitudes about financial failure as a result of the Financial Crisis and skyrocketing foreclosures. I think that in some places and some communities, there is reduced/little stigma to losing your home. But I think for many, it remains a very lonely and scary experience.

I think the other problem is that we are seeing a lot of anger coming from perceptions that some people are walking away from underwater homes while others struggle to pay. Or perceptions that everyone BUT me is getting a loan modification/refinance. These can actually work against creating a more accepting environment that sees financial failure as primarily driven by structural causes in the economy v. a failure of personal responsibility.

eCAHNomics March 25th, 2012 at 3:02 pm

Medical, law, and higher ed are industries that I called, when I first wrote about them 20 years ago, the Mafia of the Intelligentsia. They are not helping industries, they are industries that hurt people in an economic sense. It is the knowledge gap between buyer & seller that gives the seller pricing power, and “mafia” rather than the more neutral “cartel” bc the customer is vulnerable (sick, in trouble with the law, making lifetime decisions), giving the seller even more pricing power. I have been watching the U.S. economy commit slomo suicide owing to these 3 industries for 20 years, esp medical.

seaglass March 25th, 2012 at 3:02 pm

I’ve heard that something like 1/3rd to a half of all bankruptcies are the result of Medical debt. Don’t you feel a Medical system that ends up impoverishing millions is at the least unethical?

Katherine Porter March 25th, 2012 at 3:02 pm
In response to eCAHNomics @ 59

The bankruptcy attorneys have created a national organization, The National Association of Consumer Bankruptcy Attorneys. IMO, it has done a world of good in terms of improving the education/knowledge of consumer bankruptcy attorneys. More importantly, through donations from bankruptcy attorneys, it appears as an amicus (friend of court) in important consumer bankruptcy cases and tries to get the court to take debtor friendly positions. This is really a way of bolstering the difficulty the debtor faces in hiring a skilled attorney who can win on appeal.

But one problem with what you suggest is that there are limits on unauthorized practice of law and attorneys cannot practice law over the internet–even if they are banded together. To be more precise, the law lets us give general legal information but not client-specific answers. AND because bankruptcy is so complicated, it requires a lot of client-specific answers to really help people use the system.

James McGuire March 25th, 2012 at 3:03 pm

Do law professors teach attorney’s how to seek the dollar or do they teach attorneys how to reach the truth?

DWBartoo March 25th, 2012 at 3:03 pm

Thank you, Katherine, for this response, I think the Judicare model should, at least, be held up as example of what the English legal system, upon which ours is based, has considered necessary. The bifurcation in our system, the double standard, around money and standing is critical in providing a reasonable historic perspective to many Americans who simply do not realize the implications of our “system” until personally faced with it. A legal crisis, quite a much as a medical crisis can bankrupt families, much as the housing crisis will, increasingly do.

I greatly appreciate your obvious awareness and concern for this fundamental “breakdown” which our society faces. I find that many attorneys are very uncomfortable when confronted with this issue as it offends their sense that the “system” is “working” … and I consider that the legal profession MUST come to grips with actual reality and advocate for meaningful change to the legal system, even as the medical profession must advocate for change in the way in which health care (not insurance) is made available to the majority of human beings.

DW

Katherine Porter March 25th, 2012 at 3:03 pm
In response to eCAHNomics @ 61

This is a tough critique but I wouldn’t entirely disagree with you. I would say that I think your criticism is particularly apt at the industry level. When I think about individuals in these systems, I see many hard-working well-intentioned people who want to help. But at a structural level, I see your point.

mswinkle March 25th, 2012 at 3:03 pm

say a person owes a bank $10,000. That person can not pay and so the bank when filing its taxes writes off what is owed as a loss and thus reduces its tax liability. Is not then the debt discharged.

Or is the bank sells your debt on did not the company that bought the debt pay it and therefore has the debt been discharged. If not then if the company bought you debt for say $1,000 why is it legal for them to ask you to give them $9,000 more than what they paid for it?

DWBartoo March 25th, 2012 at 3:05 pm
In response to mswinkle @ 53

Agreed, mswinkle.

DW

scribe March 25th, 2012 at 3:05 pm
In response to mswinkle @ 23

In two words: “they’re fucked”.

They wind up lurching from near-catastrophe to near-catastrophe, struggling to make something near to ends meeting and, if they’re lucky, getting something approximating enough to eat and a roof and not much more.

eCAHNomics March 25th, 2012 at 3:05 pm

that there are limits on unauthorized practice of law and attorneys cannot practice law over the internet

Who made those limits?

seaglass March 25th, 2012 at 3:06 pm
In response to eCAHNomics @ 61

Higher Ed. is a joke. This is a business that is deliberately leaving millions of young people forever buried in debt even before they get out of the gate. Immoral, unethical almost criminal. In many cases the degrees they issue for hundreds of thousands of dollars are useless in today’s market place.

Katherine Porter March 25th, 2012 at 3:06 pm
In response to James McGuire @ 64

Challenging question. As a law professor, I think I have the duty to do both. My students are going to go out and become lawyers–not law professors in most instances. If they are paying me tuition and devoting years of their lives to me, and I have not taught them anything about how to run their law practice, I think I have failed them. Lawyers need income too. BUT, I try to sensitize my students to the choices inherent in various career paths. I want them to have financial security (I surely don’t want their names popping up in my next sample of bankrupt families) but I also want them to see law as an important instrument in building a better society. I am proud to be a lawyer because I believe in law as a tool to help people–and I think one real problem in legal education generally is that maybe professors are not open/transparent/brave enough in conveying this to their students and giving them the conviction to use their law degrees to do justice.

DWBartoo March 25th, 2012 at 3:07 pm
In response to eCAHNomics @ 61

Superb comment, eCAHN!

DW

Katherine Porter March 25th, 2012 at 3:08 pm
In response to eCAHNomics @ 70

The state bar associations, which license lawyers.

James McGuire March 25th, 2012 at 3:08 pm

Would it be safe to say, the morals of the majority of the people believe, they just need time to pay the excess bills down as they finally learned they exceeded their financial means in the short run?

So, why is it so difficult to get lenders to agree to extensions of time without resorting to Bankruptcy?

seaglass March 25th, 2012 at 3:09 pm

Katherine , thanks for dropping by. This topic is so depressing I’ll be saying good night.

eCAHNomics March 25th, 2012 at 3:10 pm

My job was forecasting the U.S. economy. For the problem of these industries to get to my macroeconomic radar 2 decades ago, there had to have been rampant problems forever. All I did to figure out the problem was to look at price changes ranked by industry over the prior 25 years. Besides tobacco (an addictive product that is taxed like crazy) and one or two others, those 3 industries were at the top of the list.

DWBartoo March 25th, 2012 at 3:10 pm
In response to James McGuire @ 64

Truly central question, James, law schools and Deans of such schools have a primary obligation to society, not to the ruling class and money and, of late, the law is too often used to destroy the law; John Yoo, Jay Bybee, and David Addington, come, unbidden, to mind.

DW

eCAHNomics March 25th, 2012 at 3:11 pm

I rest my case.

scribe March 25th, 2012 at 3:12 pm
In response to James McGuire @ 25

Depends on the retainer agreement and, more particularly, when the creditor files the bogus information. If it’s a Ch.13 and early in the case, i.e., before the payment plan, then the attorney is still on the scene and can challenge the creditor’s bullsh*t (or just reduce the lying creditor’s share to, say, 1% of the claim). If it’s after the payment plan has been approved (assuming the debtor is current), then the debtor is out of line and can/should be sanctioned. But, since most retainer agreements cover from filing and preparation of schedules through to court approval of the plan (13) or discharge (7), the late-coming baloney has to be confronted with more money to the lawyer. To their credit, most consumer bankruptcy lawyers will retake their clients and work with them, and it benefits the client to go back to the same lawyer who represented them earlier because he is already familiar with the case and that saves a lot of time.

Katherine Porter March 25th, 2012 at 3:12 pm
In response to mswinkle @ 67

mswinkle asks: “say a person owes a bank $10,000. That person can not pay and so the bank when filing its taxes writes off what is owed as a loss and thus reduces its tax liability. Is not then the debt discharged.

The answer is that the debt is NOT discharged. This really frustrates most consumers, who in my experience, perceive this as very unfair. The bank can still come after the consumer to get them to pay or sell the debt. Which brings me to your second question:

“Or is the bank sells your debt on did not the company that bought the debt pay it and therefore has the debt been discharged. If not then if the company bought you debt for say $1,000 why is it legal for them to ask you to give them $9,000 more than what they paid for it?”

The answer–legally–is that the deal between the bank and the debt buyer is between them. The consumer was not a party and still owes the original $10,000. I completely get how unfair this feels; I’m just reciting the law here–not defending it. BUT I would note that we could change this law if we didn’t like it. We could put tighter restrictions on the ability to collect on a debt after it has been sold.

masaccio March 25th, 2012 at 3:13 pm
In response to seaglass @ 71

That’s a bit strong. College is a personal choice, and so is the program of studies. In general, most people who get degrees do better than people who don’t go to college, and people who start but don’t finish advanced schooling.

Students figure out what they want to study, how hard they work at learning, and what they want to do next.

It is true that in this economy, things aren’t going to work out as well as they did in the past, but I don’t think we should blame colleges for that.

Katherine Porter March 25th, 2012 at 3:15 pm
In response to seaglass @ 76

NOOOO! Bankruptcy is supposed to be uplifting. It is a story about renewal and hope. Why do I say that? Because it is one of the few places in our capitalist culture where we think about softening the blows. Bankruptcy law is about picking up and starting again, about believing that one’s past does not have to be one’s future,–about the “fresh start.” We don’t always get there in practice, but I want to be clear. Over 1 million families will file bankruptcy this year. The big majority of them will be better off for having filed in terms of reducing their family’s stress, getting out from under crushing debt loads, getting some legal advice for their next steps, completing a financial education course, etc. Bankruptcy is for optimists!!! Look at Elizabeth Warren!

masaccio March 25th, 2012 at 3:15 pm

Could you tell us a little about the differences between men and women in the way they handle financial stress? I wonder if there are differences between the way patriarchal families deal with it and the way more egalitarian families handle that stress.

Katherine Porter March 25th, 2012 at 3:18 pm
In response to DWBartoo @ 78

I am very proud of my Dean, Erwin Chemerinsky. He sets an example for me and my colleagues–and our students–about the importance of the law to help people. While legal education has some serious problems, so too does the practice of law. It is a push-pull situation, and I hope we get both the practice of law and legal education moving in a better direction in the next decades.

scribe March 25th, 2012 at 3:18 pm
In response to eCAHNomics @ 45

They deal with dunning, and lawsuits, and reposessions and all the rest of the crap.

And don’t think that’s a small subset of people. In my years of practicing, I ran into a lot of people who were literally too broke to go bankrupt.

Katherine Porter March 25th, 2012 at 3:18 pm
In response to masaccio @ 84

In chapter 8 of Broke, Debb Thorne, a sociologist, writes about how women disproportionately seem to suffer from stress, insomnia, and depression as a result of being in financial distress. Her hypothesis was that when women pay the bills, and shoulder more of the difficult, low-control work of trying to make ends meet when there just isn’t enough money, women would be particularly likely to suffer negative emotional effects. That was not supported by the evidence. Instead, even when their husbands pay the bills and deal with bill collectors, or when the couple tackles it jointly, women are much more likely to suffer. Financial problems are gendered—not just in the likelihood to get into trouble, but in the degree of harm reported.

James McGuire March 25th, 2012 at 3:19 pm

Would it not be better for creditors to lose some now and recover much more by allowing the people to better their lives with a more secured position?

“McDonald’s does it via hamburgers, give me a little of a lot and I will have a lot versus give me a lot of a little if such little exists.”

James McGuire March 25th, 2012 at 3:21 pm

Have creditors created an environment that they themselves should file bankruptcy?

eCAHNomics March 25th, 2012 at 3:21 pm
In response to masaccio @ 82

Wrong on just about every point. How do 18-year olds make a personal choices that are lifetime decisions. Such a conundrum doesn’t pass teh giggle test.

So many for profit “colleges” are ripping off naive youngsters that

most people who get degrees do better than people who don’t go to college, and people who start but don’t finish advanced schooling.

will be a snark within the next 2 decades.

Of course colleges are to blame. Who else would be? The “students”?

I once asked the prez of SUNY-New Paltz what caused such high tuitions. That was a stumper. He hadn’t a clue.

Katherine Porter March 25th, 2012 at 3:22 pm
In response to masaccio @ 82

This line of discussion brings up my substantive chapter in Broke, chapter 5. I look at the educational attainment of people in bankruptcy and find that completion of a four-year degree or a graduate degree seems to insulate one against bankruptcy. Those with “some college”–either some courses or an associate’s degree or a certificate–are heavily overrepresented in the bankruptcy population. High school drop-outs or those with only a high-school degree are underrepresented in bankruptcy. Of course, this latter group may be too broke to go bankrupt, so to speak. But I think we need to worry a lot more about our message that “College Pays” when what the research shows–mine and lots of others–is that a 4-year degree pays, generally speaking. Some college may actually heighten one’s risk of financial failure.

masaccio March 25th, 2012 at 3:23 pm

I see one difference. Men seem to feel shame. In many of the Chapter 7 meetings of creditors I attended, the wife answered the questions, and the men sat with bowed heads, clasping their hands in their laps, and barely audible when they answered. The women mostly seemed OK at the meetings of creditors, but when I interviewed people preparing to file, they would report sleeplessness, and even depression.

scribe March 25th, 2012 at 3:23 pm
In response to eCAHNomics @ 59

Short answer: because every individual case is different. Also, because every bankruptcy case depends in large part on state laws, with homestead exemptions being the #1 example, but state laws impact in many places and many ways both obvious and subtle and can and will change the way a case comes out.

Katherine Porter March 25th, 2012 at 3:24 pm

I should add that from my data it didn’t seem that the higher bankruptcy presence of the “some college” demographic was a student loan problem. (That might be, I just didn’t see it in the bankrupt sample). Instead, I think this group may have the aspirations and financial behaviors of the college-educated but not have the 4-year degree to make the income to achieve those aspirations. More research is needed here.

James McGuire March 25th, 2012 at 3:27 pm

Is it possible that college has become so compartmentalized in teaching, other areas could be lacking?

Would this lacking be due in part to modern technology?

Katherine Porter March 25th, 2012 at 3:27 pm
In response to masaccio @ 92

Great observation about men and women and the emotional work of bankruptcy. I’ve seen the same thing you describe and heard it when interviewing bankrupt families. It turns out that women–not men–usually make the decision to file bankruptcy. They have to push their husbands to let them call a lawyer and have to drag them into the lawyers offices. Because women are taking action with bankruptcy to solve their financial problems (or at least try), that may be why they are coping better emotionally early in the bankruptcy process.

But this goes to Deborah Thorne’s great chapter, Women’s Work, Women’s Worry, in Broke. Women are more likely to be doing the bill paying, dealing with debt collectors, opening the mail—suffering because of financial distress. So they may be more ready to trade off the “shame” of bankruptcy to get out of a bad place.

James McGuire March 25th, 2012 at 3:30 pm

Would that suffice to say, behind every husband is a wife with a Boot? Hope so!

scribe March 25th, 2012 at 3:32 pm
In response to masaccio @ 92

Oh, yeah. That’s very true.

In most of those cases, the man has been unmanned by his (perceived) failure to support his family. And it comes across. It may not be his fault (someone got sick, etc.) but he feels unmanned nonetheless.

Katherine Porter March 25th, 2012 at 3:33 pm

FDL readers may be particularly interested in chapters 2 and 12 of Broke because they bear on some crucial policy questions and on the upcoming presidential election. In Chapter 2, sociologist Deborah Thorne and Professor Elizabeth Warren observe that over the last thirty years, the bankruptcy demographic has become even more middle class. They point to the increased financial risks of doing “core” middle class activities–buying a home, going to college, starting a family, etc. These things require more debt, and riskier forms of debt, than in past decades, and one of the result is a higher likelihood of ending up in serious financial trouble and bankruptcy.

In Chapter 12, political scientist Jacob Hacker, author of The Great Risk Shift, puts bankruptcy in the context of our overall social safety net. He notes that bankruptcy is stepping in as a backstop system for weaknesses in things like jobs and wages, health insurance, and retirement programs. One reason that bankruptcy may not always help people–as we discussed at the opening of the salon–is that some of the problems that people bring to bankruptcy–such as stagnating wages for 20 years–are not a problem that bankruptcy can solve.

masaccio March 25th, 2012 at 3:33 pm

There are a lot of stories in the book about the way people describe their feelings about bankruptcy. It sounds like many feel like failures because they can’t make it financially. Many of the stories are really sad.

I like your explanation of the way people should see bankruptcy @83. I wonder if there are studies about how lawyers handle those feelings in their clients? Is your answer @83 the way you would handle those miserable feelings?

Katherine Porter March 25th, 2012 at 3:34 pm
In response to James McGuire @ 97

I really wish my husband were reading this, but I Booted him upstairs to take care of my three little kids so I could concentrate on our discussion! Very funny!

mswinkle March 25th, 2012 at 3:34 pm

So it would seem that if bankruptcy is not an option due to your lack of ability and zero assets to pay for it, and lack of skills to navigate it then the only recourse left to discharge your debt is upon your death? Is that correct?

Does that sum up the system we live in

James McGuire March 25th, 2012 at 3:36 pm
In response to masaccio @ 100

It may be difficult for a man to admit failure on his own, but once done, humbleness abounds. This alone would making the spouses happy.

James McGuire March 25th, 2012 at 3:38 pm

As commented by a media contact, is there a concern we need to have for the littletons of the future?

Katherine Porter March 25th, 2012 at 3:39 pm
In response to masaccio @ 100

I think bankruptcy lawyers–and trustees and judges–do enormously taxing emotional work. Behind the technical law, there are real people with sadness and fear and anger. There are not studies of how bankruptcy lawyers handle their clients’ emotions and how they take care of themselves/guard against becoming jaded or depressed. It’s a good area for further research.

I think one very important thing at work is that people in financial trouble really want to be HEARD. Bankruptcy lawyers need to let their clients tell the story of their financial failure in order to counsel them on the bankruptcy process. I think that process is therapeutic for people in financial trouble. One interesting thing is that bankruptcy trustees, who usually spend 5 minutes or less with each bankruptcy debtor, often do not have the time/inclination to hear the debtor’s story of financial failure and many debtors really want to make sure the trustee knows their situation—-not because it effects the legal actions of the trustee but because they want to be understood. In our research, many people actually THANK US for taking the time to talk to them about their bankruptcy.

masaccio March 25th, 2012 at 3:42 pm
In response to James McGuire @ 103

It is unfortunate that so many marriages fall apart over money matters. The book discusses the figures; at least 1 in 8 marriages fails because of the financial stress, according to Deborah Thorne (Chapter 8). On the other hand it looks like many marriages improved dramatically after the discharge was granted.

Katherine Porter March 25th, 2012 at 3:43 pm
In response to mswinkle @ 102

I think few people in the United States have to just wait to die to escape their debts. Most will ultimately come into bankruptcy, or their creditors will give up–because we have some decent non-bankruptcy laws protecting against garnishing 100% of people’s wages or collecting all their property in a lawsuit, etc. My concern in Broke is that I think there is a cost to waiting for creditors to give up, and that families suffer in the interim. Marriages and parenting relationships are strained, and people’s ability to concentrate on their work and move ahead in life are retarded. A robust bankruptcy system, and we have a good stab at one in America, even if it is not perfect, is really important in reducing those costs. That benefits All of us, not just the people who file bankruptcy.

masaccio March 25th, 2012 at 3:43 pm

I represented a Chapter 7 Trustee who took that time, and I can say that he is much respected for it.

James McGuire March 25th, 2012 at 3:44 pm
In response to masaccio @ 106

The Book then should be mandatory reading for many a husband.

masaccio March 25th, 2012 at 3:45 pm

Chapter 11 of Broke shows that consumer debt has exploded over the last 40 years, as lenders began to lower lending standards and compensate by increasing interest rates and fees. Many people can borrow, and borrow more, as a result.

Can you think of a way to evaluate the cost and benefits of those changes? Do you have a personal opinion you would like to share?

Katherine Porter March 25th, 2012 at 3:48 pm
In response to James McGuire @ 109

Your comment makes me think about something that I say in the introduction to Broke. I would like people who have filed bankruptcy or who are contemplating it to have more resources to be able to learn about the process–not the law particularly, but more generally about how people fare as a result of the process. One of the interesting aspects of this kind of research is that it helps people realize that they are not alone–we always tell them, we are studying 2,000 people. You are one of those families. In more academic terms, I observe in the book that we don’t have many cultural rituals for downward mobility. We have housewarming parties, but nothing for foreclosure. We have college graduation, but nothing for when you finally pay off your student loans. The result is that financial failure is a very isolating experience, often with only the bankruptcy lawyer as a guide/confidante.

James McGuire March 25th, 2012 at 3:50 pm
In response to masaccio @ 110

Whereas there is a finite amount of disposal gross net income derived from GDP, and with the so-called interchange of data, why would the financial lenders willfully exceed what the people could earn?

robertarend March 25th, 2012 at 3:51 pm

I pulled “ROOTS” off the shelf the other day and spent much of the night rewatching it. Perhaps one of the most overlooked part of that ’70s TVM was when Burl Ive’s senator charactor came up with a plan to keep the newly freed slaves as not so free.

Make them all sharecroppers, but put them into the kind of debt they could never pay off; thereby nullifying their freedom to leave.

This is just what our elected officials in league with the most powerful and wealthy have accomplished starting with the “credit for all” push of the early 80s.

And now, most of us are saddled with debt we will never be able to pay off; therefore no more than slaves of many colors.

I think of this every time I see Joe Biden huff and puff.. He carried the water for the banks and pushed firmly for the Bankruptcy Reform Act of 2005__the final link to our modernday slavery. Thanks, Overseer Joe, for seeing to it we all never escape Massa BigCredit’s plantation.

masaccio March 25th, 2012 at 3:52 pm

One of the questions I used to ask people is what they planned to do next. It helped them to focus on the future, and to see the bankruptcy as a hurdle to be jumped, not a wall.

Ludwig March 25th, 2012 at 3:53 pm
In response to robertarend @ 113

Debt peonage. So, is the middle class worth it?

Katherine Porter March 25th, 2012 at 3:53 pm
In response to masaccio @ 110

It is so difficult to do a cost-benefit analysis on borrowing. Why? Because we do not have good measures for the harms of debt. We know how to count up dollars of debt but we know very little about the ways in which being in debt, including debt trouble, harms people. To see this point, just think about the thousands of studies on poverty (low income is just ONE kind of financial distress; debt problems are another). We know all about how poverty affects people’s health, their children’s outcomes, etc. We don’t know anything like this for debt. I think that kind of basic research is a great starting point for figuring out just how important it is for us as a country to make very large amounts of debt available. Before the Financial Crisis, if one argued for credit regulation, the answer was “But that would reduce credit availability.” Period. As if reduced credit availability was like eliminating all oxygen from Earth or something similarly calamitous. I think we are in a different place in our thinking about borrowing now after the Financial Crisis, but I think we still do not have good shared norms about the optimal amount of credit availability and how much risk families should bear by having to borrow to achieve middle-class things like college educations for their children.

DWBartoo March 25th, 2012 at 3:53 pm

Ah, I remember first hearing Chemerinsky when he was commenting on the O.J. Simpson, trial, Katherine.

If he was your Dean, then I well understand your impeccable moral compass, and your informed concerns and clear interest in improving the legal system.

We are agreed that the system is much in need of it.

I recall my first Con Law professor when, in 1965, I asked her about the manner in which corporations became “persons” and her pithy reply, which was, “Let us say, that it was ‘passing strange’”.

I have known several fine professors of the law, and a number of committed and thoughtful students of the law, but some of them, including a certain famous “Constitutional Scholar”, for example, seem not to have grasped the importance of the notion of fundamental “due process” … and the central importance of the Rule of Law as foundational to civil and responsible society … Frankly, the law is the principle “battleground” which will determine, on many “fronts”, the quality of our society and the trajectory of this nation’s future.

It is a genuine pleasure to have encountered you and the legal philosophy which, clearly, informs your sensibilities.

A most wonderful Book Salon, Katherine, which you and Masaccio have provided us. Thank You.

DW

BevW March 25th, 2012 at 3:54 pm

As we come to the end of this great Book Salon discussion,

Katie, Thank you for stopping by the Lake and spending the afternoon with us discussing your new book and bankruptcy and foreclosures.

Masaccio, Thank you very much for Hosting this great Book Salon.

Everyone, if you would like more information:

Katie’s website, blog (Credit Slips) and book (Broke)

Masaccio’s FDL webpage

Thanks all, Have a great week.

If you want to contact the FDL Book Salon: FiredoglakeBookSalon@gmail.com

Katherine Porter March 25th, 2012 at 3:57 pm
In response to robertarend @ 113

Bankruptcy provides an important antidote to the problem of debt. While Congress has chipped away at that protection, our system of debt relief in the United States is still much stronger than in nearly all other countries. So while the political system and industry may have facilitated/encouraged Americans to carry heavy debt burdens, they have also left us with a robust system for addressing unmanageable debt. That is exactly why I think bankruptcy is such an important topic for people interested in politics and social systems to understand.

masaccio March 25th, 2012 at 3:57 pm
In response to James McGuire @ 112

This is a fascinating problem. One aspect of it is that the calculation of the most likely outcome of mass lending. Another is the ability to sell credit card and other debts into asset-backed securities, just like the way they sell mortgages into real estate mortgage-backed securities. The ultimate holders aren’t necessarily the original lenders.

masaccio March 25th, 2012 at 3:59 pm

Katie, thanks for sharing your time and expertise. And thanks to your husband for clearing out some time for you!

Katherine Porter March 25th, 2012 at 4:00 pm

Thank you all for your thoughtful questions and participation. It was my pleasure to be part of this conversation, and I hope to engage with you again as a participant in future book salons. FDL has a great line-up, and this is a wonderful way to spend a Sunday afternoon/evening.

PeasantParty March 25th, 2012 at 4:02 pm

Katherine, This has been so interesting. I hope you sell thousands of these books as every American needs this information.

Masaccio, thanks for hosting and inserting great questions and experiences.

Bev, We all love you for your dedication and fantastic Book Salons.

mswinkle March 25th, 2012 at 4:02 pm

I guess hope spring eternal.

But people who have fallen down due to one reason or another find themselves having their wages taken and while it might not be a 100% it is enough that they struggle to just cover their basic month to month needs. if something should happen they are deep in trouble as they can not borrow anymore and in desperation turn to loan sharks.

We only have to look at countries like Greece to see it is impossible to pay back debt with more debt and the measure being taken there to reduce the debt has resulted in higher suicide rates and people literally starving.

I would suggest bankruptcy (assuming you can even afford it) like pills for a heart problem is not a solution to the debt problem. The solution is to start with how is debt created? In other words how does our monetary system work? The reality is we have a monetary system where a small group (banks and the FED) control the supply of the money and can set the terms as to how much they can charge the rest of us for using it. In addition as a result of fractional banking they can loan you or me money that they literally created out of thin air. However, and this is where the problem kicks in they only loan you the principle and not enough money to cover the interest charges to it. So at some point point the amount of “interest” owed will exceed the amount of principle that has been loaned into circulation. Thus X amount of people will not have enough “money” to pay it back as it simply does not exist.

mswinkle March 25th, 2012 at 4:06 pm

Thank your for your time. And sharing your afternoon/evening with us

DWBartoo March 25th, 2012 at 4:13 pm
In response to mswinkle @ 124

Consider, mswinkle, that it is the point of “confluence” between the legal, economic, and political “systems”, which permits and encourages the manipulation and control of society, society being understood, as simply, the way that individual members of a group of human beings, treat other individual members of that group. It is often considered that the weak and the “poor” are “failures”, but the truth now, in our time, of actual failure, is the nature of the deliberate destruction brought about by the “successful” …

DW

mswinkle March 25th, 2012 at 4:20 pm
In response to DWBartoo @ 126

agreed, but what can we do. If you find yourself caught up in the legal system how can you protect yourself when the system that is sold to you as there for your protection (legal system) is really there to protect the system against you. Aside from going off the grid and living in the woods, not an option for most of us what can we do?

We are under assault on all fronts and you can not beat a system where you have to use that system to do it.

Ludwig March 25th, 2012 at 4:29 pm

So, comrade Bartoo, there was no affirmation of the worth of the middle class. Surprising?

DWBartoo March 25th, 2012 at 4:44 pm
In response to Ludwig @ 128

Book Salons are just too short, Ludwig, sort of scatter-shot affairs, for the kind of in depth “exchange” which would “pin down” the conversation more precisely, but your point, nonetheless, is exceedingly well taken, and VERY important, to the “discussion”, so far as I am concerned.

Frankly, until the middle class comes to understand how precarious is its “perch”, the little birdies aren’t going to sing very loudly … raising your oft mentioned concern of TLTL … and, as mswinkle points out, the “protections” we “enjoy”, are perverted and under the control, at the moment, of our tormentors … yet, clearly Katherine is much more open to the truth than most members of the world’s second oldest profession.

DW

Ludwig March 25th, 2012 at 4:54 pm
In response to DWBartoo @ 129

But comrade, not even an “of course”. O my goodness, what a landmine she had to dodge! I think the members of the world’s oldest profession might have a greater sense of humor. *wink*

masaccio March 25th, 2012 at 5:05 pm
In response to Ludwig @ 130

The book makes it clear that Porter cares intensely about the damage that debt and stagnant wages have on the stability of the middle class. Take a look at her answer @116. She recognizes the danger of debt to the middle class, and she realizes that without evidence of damage, nothing will change.

I didn’t mention it, but she is the heir to the work done by Elizabeth Warren on the CBP, and has worked to expand the information collected, as she says in @17 to include a lot of data about who files and why.

raven333 March 25th, 2012 at 5:26 pm

I will briefly add that tools for filing a bankruptcy are available from Nolo Press, link. While it is a complicated procedure, these are available to literate non-lawyers who do not have the resources to hire a lawyer.

They also have a bankruptcy blog, link.

mswinkle March 25th, 2012 at 5:42 pm

The book makes it clear that Porter cares intensely about the damage that debt and stagnant wages have on the stability of the middle class. Take a look at her answer @116. She recognizes the danger of debt to the middle class, and she realizes that without evidence of damage, nothing will change.

Without evidence nothing will change? There is more evidence on a daily basis how what is happening is crippling the middle class. Our problem does come from lack of evidence it comes from those in charge are part of a co opted system that works against us.

I gather that you are a lawyer. But, and I could be wrong, it seems you work within the confines of a system that is designed to harm not help most people. It would be great if people like you and Ms Porter could use your great legal minds to start thinking about how we can use the law to defeat what is patently unfair. There has to be ways. TPTB while clever can not of though of everything. And, there has to be loopholes in their legal system that can be used to fight back.

I would suugest for example thinking along these lines?

Say A owes B $10,000 on his credit card. B takes A to court what proof does B have to show that A owes this money? Is it just the statements or does he have to present the bill which A signed for a $100 dollar purchase with C? If it is the latter than getting B to produce all this would slow things down.

B as a result of A not paying has added interest and fees and this keeps compounded. What documentation does B have to show that all these fees etc are legal?

If B has already sold on A’a debt to C for $1,000 dollars does C now have to get all the back up supporting B’s claim? If so that would make C’s job much harder and the more “A”‘s insist on it, the more likely C might think twice before buying off A’s debt.

This is just one idea and I am sure there are many more and if you and other great legal minds got together I bet we could come up with all kinds of ways to at least slow down the draconian effects of this system.

Ludwig March 25th, 2012 at 5:43 pm

She realizes without evidence of damage, nothing will change.

That’s got clinical validity, but clearly it’s evasive. You can see the incoherence in #116, where she blames a “lack of optimality” on the lack of “good measures for the harms of debt” when the real problem is systemic fraud due to deregulation due to neoliberalism. Some things are not meant to be measured.

Perhaps I missed her explanation of the strategic use of debt for wealth extraction and the abysmal failure to account for risks by debtees, debtors, and regulators. Should “good measures” really be of concern when clear harm was not given serious attention?

mswinkle March 25th, 2012 at 5:45 pm

just to clarify above. C stands for shop etc where A charged an item. And C who bought debt from B should be referred to as “D” so as to avoid confusion

juliania March 25th, 2012 at 5:52 pm

I had nothing to contribute, being of the class which doesn’t get studied, sort of like dark matter we are becoming, rather intriguing. But always I pick up gems from the commentary, so thanks very much for that. Like mswinkle I do wonder about sustainability, and I loved the comment about collection agencies going into bankruptcy themselves – that’s one to sleep on.

To me, credit cards were the beginning of the end. Or, the beginning of the beginning of the end.

Ah those young inspired lawyers – can’t we find something for them to do to right the ship instead of rearranging the deck chairs on – never mind, you know how it goes.

juliania March 25th, 2012 at 5:56 pm
In response to mswinkle @ 133

The way you have put it, mswinkle, it exactly duplicates what has happened with mortgages, doesn’t it? Only with debt all the onus is on the one who has been shafted by the system, who conveniently disappears – not into a black hole, I optimistically maintain, but into the warm dark matter presence that puts galaxies where it wants them to be, in a loving way of course.

Ludwig March 25th, 2012 at 5:59 pm
In response to mswinkle @ 133

Technical skirmishes like that just raise the take for lawyers. Clearly the 2005 bankruptcy act was a setup and we would be better informed as to what political weak points can be accessed than with tepid professional judgments.

mswinkle March 25th, 2012 at 6:02 pm

one other thing.

I think there is a general assumption that ignorance under the law is no defense? So the fact that most people have no understanding of how it all works they can not use that as a defense.

When and how was it decided ” that ignorance under the law is no defense?

what law does that apply to. All law ‘common, statute, international etc”

On what grounds was that decided? precedent. just because some judges said some time ago that this is the law.

And what is the valid basis for it. is it that if I and others could use this defense than the majority would be harmed by it as it would undermine the legal system? So does that mean an individual right to assert ignorance is usurped by the majorities rights. If so where is the law stating that?

again as I said just trying to think out of the box here and ask questions because it seems to me that what we have is blanket statements such as ‘ignorance of the law is no defense” and then we just like lemmings go along with it. When the questions we should be asking is why it not a defense? on what grounds? and what is the proof to back up those grounds? and where is the law that says those grounds are legal

mswinkle March 25th, 2012 at 6:07 pm
In response to Ludwig @ 138

while i agree it may be technical it is valid. While if only a few lawyers do it well it would only result in more fees fore them. But if every lawyer did as part of the process of advising their clients it would slow down, and grind down, the wheels of so called justice.

That is my only point, but in this slow down it would give all a chance to look at additional ways to put more cracks in this criminal system.

Ludwig March 25th, 2012 at 6:14 pm
In response to mswinkle @ 139

What basis? Why the basis that law would be effectively invalidated without it.

In the Law and Economics movement, instead of a normative evaluation of the cost of law, we got analyses of it’s profitability. It’s a sort of trickle-down, supply-side formulation – boost productivity and the cost of law will be less noticed.

Except by all the no-accounts who don’t deserve justice anyway.

Ludwig March 25th, 2012 at 6:20 pm
In response to mswinkle @ 140

it would slow down, and grind down, the wheels of so called justice.

Sorry, you might as well demand your lawyers bill you less – it’ll get you nowhere (unless you can already get “justice” to spare).

Ludwig March 25th, 2012 at 6:23 pm

Law is, you know, a *********’s profession.

mswinkle March 25th, 2012 at 6:23 pm
In response to Ludwig @ 141

agreed but that then begs the question is that basis legal? take the constitution for example it was signed and created into law by a small group of people. But where did they get this authority? who gave it to them? and how did those people that gave it to them have authority to do so./

These are questions that need to asked?

mswinkle March 25th, 2012 at 6:29 pm
In response to Ludwig @ 142

i disagree. say the cost of legal fees to file bankruptcy are $10,000. just for argument sake. Step one you and every one being pursed demand that the debt be proven. That means billions on billions of receipts have to be submitted. I think it would slow the system down quite a bit. If your lawyer was acting for you they would demand this. Failure to do so means they are not so acting for you and would open them up to lawsuits to.

pdaly March 25th, 2012 at 6:29 pm

I missed the salon, but wanted to see if there was more discussion about this claim which, if true is ironic: that the majority of student loan defaulters for the GSL (maybe all student loans?) tend to be lawyers.

Lawyers learn to ask the question ‘what are the penalties for not following the law?’
If lawyers make good money, perhaps the penalties (at least in the 1990s when I heard this bit of wisdom) of not repaying student loans were minimal.

DWBartoo March 25th, 2012 at 6:31 pm
In response to juliania @ 137

Yes, it is unfortunate that the discussion could not find the opportunity of considering the moralistic admonitions of the victims, beyond the “contempt of court” by which judges express their class prejudice while pretending that poverty and debt are failings of will and morality, being both unable and quite unwilling to consider the whole, juliania, as the echos of the Puritan “ethic” still dominate the chambers of the law and drown out all more rational and honest human consideration.

If greed is to be fully justified, then its victims, perforce, must be thoroughly vilified.

DW

pdaly March 25th, 2012 at 6:33 pm

We have national health care.

Since access to the law is now such an important part of middle class safety net, what about a push for national legal coverage, too? (to protect the middle class in mortgage fraud, credit card and loan debt, bankruptcy, etc.)

I ask this knowing full well that ‘the law’ has been suspended for the too big to fail banks and for the 1% , too. Nevertheless, since the average person still is held to the law, lawyers for all would be minimal demand by the 99%.

Ludwig March 25th, 2012 at 6:42 pm
In response to mswinkle @ 144

Yes.

Where did they get this authority? Oh my, isn’t that an unanswerable question?

mswinkle March 25th, 2012 at 6:45 pm
In response to DWBartoo @ 147

You are smarter than I and would love your thoughts on this

agreed but that then begs the question is that basis legal? take the constitution for example it was signed and created into law by a small group of people. But where did they get this authority? who gave it to them? and how did those people that gave it to them have authority to do so./

These are questions that need to asked?

and does that mean you and me could get together and write a constitution that says all debts are hereby null and void. If not, why not? what gave those that wrote the constitution more authority than we have?

Frankly I hope katherine and masaccio are reading this because they can perhaps shed some legal light on this

mswinkle March 25th, 2012 at 6:47 pm
In response to Ludwig @ 149

Yep and the one we should all be asking. And, if Katherine and masaccio want to claim they are working to help us then they should come back and answer this for us

thejoester March 25th, 2012 at 6:54 pm

Hi all, I’m an attorney that does bankruptcy in the Northeast. Bankruptcy is federal law, so in general it is the same nationwide. I’ll try to answer some of the questions asked here about BK (with the usual disclaimer that my posts are not to be deemed legal advice, seek an attorney for questions about your case, etc etc)

* what is the basic difference between filing for chapter 7 and filing for ch 13? advantages, disadvantages?

Chapter 7 is the quick BK – get rid of all dischargeable debts in exchange for losing any nonexempt assets. Those two terms are very important for bankruptcy. Chapter 13 is the repayment BK, where you come up with a 3-5 year repayment plan that the court must approve. Your dischargable debts are only discharged after all payments on your plan are complete, which is why it’s such a difficult hurdle, as a lot can happen in 3 years. By contrast, Chapter 7 can be done in a few months if everything goes right from the start.

Many important types of debts are not dischargable in bankruptcy – generally, alimony and child support, taxes owed less than 3 years old, criminal/DUI judgments, student loans (except in essentially impossible cases), and generally, secured debt (debt secured by collateral such as home mortgages and car payments). You can get rid of secured debt in bankruptcy if you agree to give up the asset securing the debt.

The downside of Chapter 7 is that any asset that is not exempted can be sold by the court to satisfy your debts. There is a standard set of exemptions under federal law which allow you to keep personal property up to a certain value. Depending on the state you live in, you can choose either the federal or state exemptions, or you may only have the choice of the state exemption. Exempt assets under federal law include Social Security payments and retirement accounts; non-exempt assets include equity over a certain amount in your house, vehicles worth more than what the law allows (only a few thousand $).

In Chapter 7, the law imposes an income limit – if you and your spouse make more than the gross amount based on your state of residence and family size, generally you cannot do Chapter 7. People do Chapter 13 mainly because they’re ineligible for Chapter 7, or they want to protect an important asset which would be at risk of being sold off by the court in Chapter 7, such as a home with equity. Chapter 13 by contrast has a debt limit – if you have too much secured and/or unsecured debt, you can’t do 13.

mswinkle March 25th, 2012 at 7:00 pm
In response to thejoester @ 152

Thank you for your information.

but like all lawyers posting here your advice is based on the fact the constitution gave congress the power to pass such laws as the bankruptcy law.

So my question to you is

the constitution for example it was signed and created into law by a small group of people. But where did they get this authority? who gave it to them? and how did those people that gave it to them have authority to do so./

These are questions that need to asked?

and does that mean you and me could get together and write a constitution that says all debts are hereby null and void. If not, why not? what gave those that wrote the constitution more authority than we have?

Ludwig March 25th, 2012 at 7:01 pm
In response to thejoester @ 152

Hey Joe, how’d you find us?

thejoester March 25th, 2012 at 7:10 pm

Article 1, Section 8 of the U.S. Constitution gives to Congress the power “to establish…uniform laws on the subject of Bankruptcies throughout the United States.”

If you want to be hypertechincal about it, the Bankruptcy Code does not say debts are null and void; a bankruptcy discharge acts a permanent bar from enforcing any judgment against the debtor, and acts as a permanent injunction against a creditor from seeking repayment on the debt. See 11 U.S.C. § 524(a)(1)-(3). If you want to see the entire Bankruptcy Code, you can go to http://www.law.cornell.edu/uscode/text/11

While you can buy a do-it-yourself book to do your own bankruptcy, or go to bankruptcy court websites to get some advice, as you can see, along with all the rules of Bankruptcy Procedure, the Bankruptcy Code is a scary thing to navigate.

thejoester March 25th, 2012 at 7:11 pm
In response to Ludwig @ 154

I’m a longtime lurker on FDL, DKos and other progressive blogs. Just wanted to provide some info! :-)

mswinkle March 25th, 2012 at 7:15 pm

Article 1, Section 8 of the U.S. Constitution gives to Congress the power “to establish…uniform laws on the subject of Bankruptcies throughout the United States.”

and again I ask who gave those that established article 1 section 8 the authority to establish this

DWBartoo March 25th, 2012 at 7:18 pm
In response to mswinkle @ 150

I sincerely hope that we may all dispense with this “smarter than” business, mswinkle, it being neither true nor useful to the conversation which those of equal courage and equal “stake” MUST needs engage.

If we speak of this nation’s beginning, for “founding” is both too pompous and raises the Founders above all other humans, as pillars of wisdom when all of us must know that simply is and was not so.

Let us consider that the efforts of “many” … from the ones, like Thomas Paine, who wrote the words which touched human hearts and caused them to consider, to imagine beyond what they had been led to “believe”, both what was possible and what was the “common” person’s fate which, then, was to be a “subject”, essentially, the only-one-step-removed from the tyranny of serfdom sense of “self”, the circumscribed sense of servitude, indentured or otherwise, to the appeals of the merchant class, the gentry, as were most of the “Founders” to a new and “broader” sense of “freedom”.

Had not the Declaration of Independence, a document which can honestly trace it linage back to the Magna Charta articulated the PRINCIPLE that governments gained their “just power” ONLY from the CONSENT of the governed?

Think how heady such a notion must once (and ever) have seemed?

Basically, the Founders, had the advantage of a Monarchy that was elsewhere engaged and unable to secure the speed and the wherewithal to put down this petty resurrection with dispatch and overwhelming force.

Some seventy percent of the populace was enthralled with the “prospects”, while a solid twenty-five percent were outgunned and out-flanked …

The “legitimacy” was there for the taking … and so … it was taken, and a small token of self-rule was deemed sufficient for the allegiance of the many who, incidentally, were more literate than the population of this country is today … yet, considering the “prospects” a little was held to be worth more than the pittance of freedom and “standing” as British “subjects” that was held before … consider that once, New York was New Amsterdam and the province of Dutch rule … Within the living memory of some was the history of such “change” as that, so the “prospect” of even a “greater” change was welcome and welcomed.

And the first thing our document writing Founding Class did was copy the English legal system, English Common Law, tweak it a bit and call it their own. How expansive was it? Not very. How fundamentally, just? Nor very …

But IT was … OUR OWN …

Think of the early rebellions, of the common resistance to central authority? We are little taught of such things and most historians are loathe to provide an honest accounting …

DW

thejoester March 25th, 2012 at 7:21 pm
In response to mswinkle @ 157

They gave themselves the authority. That’s the great thing about politics, when you’re in power you get to change the rules; and the more things are up in the air, the more you’re able to get away with it. Don’t mean to be snarky, but it’s the truth.

If you’re an anti-Federalist, you’d argue the Framers didn’t have the authority to rewrite the Articles of Confederation. And historically/morally/politically, they might have been right and the Framers wrong. But absent amendment or revolution, for better or worse, we’re stuck with the Constitution we have.

DWBartoo March 25th, 2012 at 7:29 pm
In response to mswinkle @ 157

You speak of one of the “tweakings”, mswinkle, for both the burden of taxes and the destructive power of debt was not foreign to the “interests” of the merchant class, to such as John Hancock and others who, while wishing to protect themselves, primarily, needed a uniformity through out the union to conduct business and advance the cause of money. That those protections, for some, white males possesses of a certain minimal wealth, also came to protect certain, but not ALL others, is part of an intriguing Constituional “history”.

DW

DWBartoo March 25th, 2012 at 7:32 pm
In response to thejoester @ 159

Well documented snark, thejoester!!!

It was a “question” of “majority” (and money) rule … as Jefferson, John Adams and Franklin quickly saw and lamented …

;~DW

mswinkle March 25th, 2012 at 7:34 pm
In response to thejoester @ 159

I disagree. the law is based on x having the legal authority to say Y. if x does not have it and it is just there say though then it is not enough. It is not a question of anti framers versus framers that is a smokescreen. It is a question of what basis does the framers have to say they have authority?

If they just took it? From whom did they take it from? and did those people even have it to give it to them?

these are questions that need to be asked and you trying to narrow it to framers vs anti framers is a smokescreen argument.

So again I ask and who and on what authority did they have to pass this. And if as your answer suggest they just took it to be so, it does not make it so.

And it would be great if you and other legal minds out there instead of spending time advising clients as to chapter 7 vs chapter 13 started asking n court these questions

doubt you will

mswinkle March 25th, 2012 at 7:39 pm
In response to DWBartoo @ 158

i asked you a simple question.

On what and on whose authority did they have the right to sign this document and make it the basis for our system today.

It is a simple question “where and from whom did they get this authority”

thejoester March 25th, 2012 at 7:39 pm

Referring to #7 of Ms. Porter’s findings, I read at some other blog that speculated African-Americans might be more likely to file Chapter 13 versus 7 because they want to keep their home more, even if underwater. Unlike Chapter 7 where the bankruptcy only temporarily stops the foreclosure process, once you have a confirmed Chapter 13 plan and start make payments, the bank is obligated to take those payments (unlike a loan mod where they can take as many trial payments as they want and not give a permanent mod).

The idea would be that white families are more likely to have other kinds of assets, they would be more willing to ‘walk away’ from underwater homes, presumably feeling more confident they could get access to credit to buy real property in the future.

That explanation is frankly even more depressing than the lawyers steering AAs to 13 out of greed or gullibility. :(

mswinkle March 25th, 2012 at 7:48 pm

Okay i am going to put this another way.

the framers drafted X and the majorities silence at the time implies they agreed to X.

So if I draft a new constitution does that mean if the majority says nothing it is now also the law. I highly doubt that. So what is the basis that made what the framers drafted law?

DWBartoo March 25th, 2012 at 7:48 pm
In response to mswinkle @ 162

Ah, mswinkle, I do not consider that thejoester was “narrowing it”, he was simply stating that a momentary vacuum presented itself, and, as I said, the only power which could have successfully contest the seizing of power did not and could not.

Let us be blunt, despite the hopes of Cicero, the function of the “law”, is, primarily to protect the established status quo … IT it is not “originally” intended so, and that is speculative in the extreme, then, soon enough, wealth and class, unless somehow deflected, manage and dictate the law to their own singular advantage.

So you are most correct, there are no little “fixes”, there must be a wholesale reworking, but for that to succeed n “educational outreach” the like of which has never been seen will, of necessity, be required.

Now, part of that will be the lesson the elite cannot fail to “deliver”, the trick and the question, is what will happened when that first grim and dire lesson has mostly been learned?

Then it will be either demagogues or reason …

THAT is what we all face.

Nothing less.

And no place is it for the faint of heart or the wavering …

Perhaps, you would like a sweeter outlook, a gentler “rendition”?

How sweet, how wonderful, if it were but so.

These are the times which try human souls …

All that hangs in the balance … is everything.

Most will seek their “diversions” and hide their precious heads in the sands of time … to no avail.

Tyranny is here …

Whatever may come after, mswinkle … Is us to us.

SW

thejoester March 25th, 2012 at 7:52 pm
In response to mswinkle @ 162

The Framer’s view of what the law would be prevailed because they had more political power than their opponents. Law is a tool created by the political ruling class to embody their political (and economic/social/moral) preferences. I’m surprised this has to be said on a progressive blog, of all places!

Lawyers have next to no power to change the law; in court, they have to follow the rules according to what the presiding judge says what they are, or they get sanctioned and lose. The only way a lawyer can ‘change’ the law in court is to argue a law/rule is unconstitutional, and have that view ratified by a higher court. 99.99% of the time, that won’t happen.

Get enough political power, in the form of a movement or new party or caucus within the Democratic Party, and you can change any and all the laws you want.

DWBartoo March 25th, 2012 at 7:52 pm
In response to mswinkle @ 165

FORCE. The ready willingness to imprison or kill.

What power does Obama now claim?

Now that, mswinkle, presents the next question, which I shall ask you.

What do you propose to alter this “pattern”?

Those are the words, the ideas we need.

Who has the courage to begin … to discover, or point out a new pathway?

I suggest that is what we all must ponder and answer.

What do you think?

DW

pdaly March 25th, 2012 at 7:57 pm
In response to mswinkle @ 163

You might ask the same thing of European nobility and the source of the Devine Right of Kings.
Where did the current Queen of England get her right to the throne? It was not by vote.

The power to rule in Europe was taken, not granted– except granted in a way by other’s quiet acquiescence to the new order or created by the vacuum left by the violent deaths of the protestors to that power grab.

I assume early Americans were busy farmers and all could not take time off to go to Philadelphia to philosophize about the new America. They had to rely on their locally chosen (?) representatives to argue for their common interests.

mswinkle March 25th, 2012 at 8:00 pm

They gave themselves the authority. That’s the great thing about politics, when you’re in power you get to change the rules;

So again I ask you rather then wasting your great brain on bankruptcy laws. tell us this. what rules did they change? And who did those rules benefit? them or all those living at the time these rules were changed. If it were the former then we can start to build a counter movement. By questioning quite simply on whose authority and for whom were they working for

DWBartoo March 25th, 2012 at 8:00 pm
In response to thejoester @ 167

True, but only if brute tyranny, which I submit this nation is now become, does not outlaw, as sedition, any movement or action toward political viability.

What, honestly, thejoester, do you consider are the odds which we, if you agree that the people are “caught”, and regarded by the ruling classes as “the enemy” … actually face?

We’ve HR 347 … and the new Martial Law as just released regarding war preparations, in the guise of “protecting resources”. And a President who claims the power to kill anyone, any where and at anytime without essential due process …

What do you think, or consider?

Are you more sanguine that reason, tolerance, and understanding will prevail, will the “lesser evils” become angels, perhaps?

;~DW

mswinkle March 25th, 2012 at 8:02 pm
In response to pdaly @ 169

exactly my point. which you seem to miss. ON whose authority. Be it kings, Queens, or founding fathers.

that is the central question. who agreed to this

pdaly March 25th, 2012 at 8:04 pm
In response to mswinkle @ 172

Who agreed to this? Certainly not the Native Americans who did not believe a man could “own” Mother Earth.

thejoester March 25th, 2012 at 8:07 pm
In response to DWBartoo @ 171

DW, I have no greater expertise in these questions than you do, and what knowledge I do have comes from my undergrad polisci degree, not law school. Being a lawyer is only for paying the bills; the fatcat lawyer stereotype notwithstanding, I’m way down in the 99% myself.

The last thing I’ll say tonight is this: student loans need to be dischargable in bankruptcy. If not, Generation Y will be forever strangled by debt.

DWBartoo March 25th, 2012 at 8:08 pm
In response to mswinkle @ 170

I suggest that until the issue of governmental “legitimacy” is broached, and shared, and comes to be understood, that “the people” will not dare very deeply question POWER or the “legitimacy” it assumes, mswinkle.

Again, what fulcrum would you suggest that might lever a broader and deeper understanding?

Certain things must “play” out … there must be widespread, deep, and undeniable suffering before the pregnant moment may come, what then?

What have you to offer the people now, and then? To inspire or encourage?

What will “move” the change we both regard as necessary as inevitable, if humankind is not to vanish from the face of the earth?

DW

mswinkle March 25th, 2012 at 8:11 pm

BTW katherine I know you are lurking and reading this. How do I know I work on the other side of your business marketing and selling products. So we always monitor what is said.

Feel free to weigh in and add your thoughts

bet you will not.

DWBartoo March 25th, 2012 at 8:11 pm
In response to thejoester @ 174

I agree with your last sentence, unless first comes the revolution, and I hold that it MUST be a nonviolent one … else it will be mercilessly crushed … or …?

Thank you for visiting, thejoester, I hope you might return, for your thoughts are appreciated and your wit anticipated with pleasure.

;~DW

DWBartoo March 25th, 2012 at 8:15 pm
In response to mswinkle @ 176

Is that any way to encourage a bet?

You have to make it more attractive than that, mswinkle.

You know, “presentation”.

Isn’t that the “euphemism”?

Treat it like a war, sex it up a bit …

Meanwhile … things continue in a downward spiral …

DW

mswinkle March 25th, 2012 at 8:17 pm
In response to DWBartoo @ 175

I suggest that until the issue of governmental “legitimacy” is broached, and shared, and comes to be understood, that “the people” will not dare very deeply question POWER or the “legitimacy” it assumes, mswinkle.

Simple really. Every law govt passes is granted to them through the constitution. If katherine and her ilk really cared about the people the question to ask is what gave 16 or so, sorry not from the US, so don’t know the exact number, the authority to make this law.

simple question.

still waiting for an answer

mswinkle March 25th, 2012 at 8:21 pm
In response to DWBartoo @ 178

agreed. but there is no way I can sex this up for her. I think it was Upton Sinclair who said

“when a man’s wage is predicated on him being blind the truth he will stay blind”

messed up the quote a little but the message is quite clear

DWBartoo March 25th, 2012 at 8:25 pm
In response to mswinkle @ 179

I don’t mean to engage in semantic quibbles, mswinkle, being curious where you hail from, but “authority” is the power “assumed” by a government, a government becomes “authority” … the power that you speak to is also “assumed” but it is backed by force of arms, not any “reason” or essential “consent” … as it should be … that was the “fiction” I was trying and failing to convey.

“Just” power IS the issue and, in the USA, there never WAS such just and legitimate power, only the lie of it, the myth, the pretense of it.

No one, no someones, “granted” this “power”, it was taken, it was usurped.

How many will understand or accept this truth do you imagine?

Do you?

DW

DWBartoo March 25th, 2012 at 8:25 pm
In response to mswinkle @ 180

;~D

pdaly March 25th, 2012 at 8:29 pm
In response to mswinkle @ 179

I like your persistence with first principles.

However, does it really matter now?

Up to 10 years ago and pre 9/11 (no matter how we got to the legal point) Americans were against torture, believed in innocent until proved guilty in a court of law, and entitled to a fair trail before punishment. The NSA workers believed it was illegal to spy on Americans.

Now despite all that common ground and accepted wisdom, the law has devolved and people are literally getting away with murder.

Asking about first principles does not help us at the moment. Our current laws and natural laws are being destroyed by the politically powerful and legally immune.

mswinkle March 25th, 2012 at 8:30 pm
In response to mswinkle @ 179

Oh and how do we defeat this. we need to go into the belly of the beast. So let one brave citizen here fight for example the tax law. FDL raised a few hundred thousand for OWS so we can do that again

the tax law plain and simple like most laws we live under derives its authority from the constitution. Some have argued, and failed, is the tax law constitional.

the question that should be asked on who and on what authority did 16 men have the right to say we by signing this now bind all future generations to it

DWBartoo March 25th, 2012 at 8:35 pm
In response to pdaly @ 183

That is it precisely, pdaly.

Such democratic “traditions” as this nation rode in on …

Are but shadows of empty drivel.

Were they held to the essential being of each citizen, than never could such tyranny as has assailed this nation, for every year, if we are honest, from the end of the “good war”, reaching their clear and visible presence with the lie of the Gulf of Tonkin and and their full naked power in Bush v. Gore.

There is no longer even the pretense, the kabuki is second-rate, and the Rule of Law quite utterly dead.

DW

Ludwig March 25th, 2012 at 8:36 pm
In response to pdaly @ 183

I guess hers could be a test. Here ya go, mswinkle, “The will of the people shall be the basis of the authority of government.”

Did I pass?

mswinkle March 25th, 2012 at 8:37 pm
In response to DWBartoo @ 181

agreed the power was usurped.

Exactly, and the entity that enforces it is the legal system. So one has to peel back the onion, so to speak, and show this, and in doing so it leaves the king quite naked. The onion here was created with the constitution, expose that and well things will unravel.

DWBartoo March 25th, 2012 at 8:40 pm
In response to mswinkle @ 184

Say it, mswinkle!!

Beat ’round the bush no longer, out with it!

As you see and perceive it.

For, if you expect the question to raise the awareness of others, in their perplexity they will not understand and thank you … they will despise and vilify you … they will not say. “Why, obviously NOTHING”, they will not even think it, you will merely give the majority a headache, and provoke a nasty temper tantrum which a cunning demagogue will make use of.

DW

DWBartoo March 25th, 2012 at 8:43 pm
In response to mswinkle @ 187

Agreed, in total and completely.

There! You said it.

Now, how shall we spread the news?

;~DW

mswinkle March 25th, 2012 at 8:44 pm
In response to pdaly @ 183

Wow. so that is it. All I have tried to point out here tonight is that every law be it bankruptcy, the patriot act gains its legitimacy through the constitution. Fight that and we can turn everything on its head.

This is what we we should be discussing and how can we do it. And asking katherine etc for their help to guide us

Ludwig March 25th, 2012 at 8:45 pm
mswinkle March 25th, 2012 at 8:47 pm
In response to DWBartoo @ 188

what are you trying to say here. Please say it in plain english

Ludwig March 25th, 2012 at 8:47 pm

Fight the constitution?

Oops, I need another song.

DWBartoo March 25th, 2012 at 8:56 pm
In response to mswinkle @ 192

That it must be said straight out … but in such fashion so that it sneaks up on the awareness of “the people” … such truth as we are speaking is frightening to the many, is, in its raw and blunt form, a terrifying thing.

Some who are younger, may see the truth quite clearly, but most others will resist the truth.

Take, for example, the legal profession … how many within it, even here or at the “Wheelhouse” are prepared AND willing to take such a stand?

I have argued for years that members of that profession MUST dare stand up, and say, out LOUD, what we have said, here, tonight.

Either a surfeit of personal caution or “deference” will prevail OR else the reality will be denied, even as you mentioned above …

Therefore, beyond reaching out to others one at a time, as we are doing, how shall this most honest but INCREDIBLE truth be gotten across?

That is the gist of my question, mswinkle, to you?

Who will help, specifically, who will DARE?

DW

mswinkle March 25th, 2012 at 9:08 pm
In response to DWBartoo @ 194

well I will bloody dare. the question is who will back me. the issue is quite simple all our laws are derived from the power granted in the constitution.

who gave those the created the constitution that authority? I mean what was the ethic make up of america at that time. Because those that signed it were all white men.

What percentage of the population were

black

native indians

women

and so on

and how could a dozen or so people have the authority to sign away the right of everyone else

Katherine I know you are reading.

Please inform us how this is law

pdaly March 25th, 2012 at 9:09 pm
In response to mswinkle @ 190

I thought you were trying to dispense with the US Constitution (as an illegitimate document unless chain of custody/power could be established) from your earlier comments.

Traditionally we have believed the consent of the governed (We The People) provides our government its legitimacy.
To protect against tyrants telling us what to do, to be, or to believe we divided the power into the legislative, judicial and executive branches.

Since 9/11 (and definitely before but to a less successfully sustained extent) the Executive has claimed super powers and has carved out the judiciary when doing so is convenient to maintaining its hold on power (ex., prevent judicial review and likely rejection of claimed executive powers to kill Americans without even indictment or trial), avoided executing the law when it meant harming a powerful group (hello military contractors and too big to fail banksters with robosigners and their mortgage document fraud to boot), and ignores citizens’ rights to privacy (recent extension of retaining to 5 years information on all Americans even without ties to terrorism).

Central to the Executive Branch’s claim to superpower is the war footing that they claim 9/11 and the AUMF provided the Executive branch. We need at this point something like a discovery that the 9/11 hijacker pilots had American green cards at the time of 9/11. This would retroactively make 9/11 a domestic “crime”– not a war on terror (which it isn’t in any case). It would also make the AUMF unnecessary and turn the President back into a mere human.

However, it doesn’t help matters that the Legislature falls in line with any of the perversions of the Constitution claimed by the Unitary Executive. And the lack of “standing” to approach the US Courts prevents average citizens from pestering the Judiciary to pipe up and put a stop to the power grab.

Gerhart March 25th, 2012 at 9:13 pm
In response to DWBartoo @ 194

So now a bunch of you who bemoan the erosion of rule of law now are bitching about the Constitution?

Unbelievable. You don’t know what you want.

Ludwig March 25th, 2012 at 9:17 pm
In response to pdaly @ 196

All the Good Germans know this is a farce.

Ludwig March 25th, 2012 at 9:18 pm
In response to Gerhart @ 197

Speak plainly, my good German.

Ludwig March 25th, 2012 at 9:22 pm

Elton, Rock it, man.

mswinkle March 25th, 2012 at 9:23 pm
In response to Gerhart @ 197

excuse me i have never bitched about the erosion of the rule of law.

as quite frankly it has never existed.

so what is your point

mswinkle March 25th, 2012 at 9:24 pm
In response to Ludwig @ 199

and as for you what point if any are you trying to make

Ludwig March 25th, 2012 at 9:33 pm

Too many compradors in this country, comrade. Words on paper cannot cage the larceny in their hearts. Authority, whose authority you wail … why the conspiracy of millions of compradors, that authority.

You, comprador, yes, I am talking to you.

mswinkle March 25th, 2012 at 9:35 pm

k well i am off to bed. it is quite obvious here despite all the huffing and puffing about the numerous stores posted here daily that few are prepared to go to the root of the problem and offer up ways to uproot it.

I offered up what I see as the root of the problem. Simply if the laws we operate under have no authority, and do not take my word for it just look at how those in power ignore them. then why are the rest of us abiding by them. And what can we do to change that?

mswinkle March 25th, 2012 at 9:38 pm

comrade? compradors? i mean really those are the only words you know to convey what you are trying to say.

Ludwig March 25th, 2012 at 9:42 pm

Good night, comrade.

Ludwig March 25th, 2012 at 9:43 pm

You need an explanation?

DWBartoo March 25th, 2012 at 10:31 pm
In response to Gerhart @ 197

How long have you, Gerhart, been paying attention?

It is not what I want, it is what a civil and sane society must have.

That being; an actual functioning Rule of Law.

Were the Constitution honored as it should be, as it should have been from the very beginning …

Then there would be no need of this discussion and your pip-squeaking pique, if such it is, would never have been “needed” to be uttered or exposed.

IF you have something, other than mindless criticism to offer, THEN share it.

Frankly, I don’t give a damn what you have to say unless, you very, soon say something of worth and of moment.

Otherwise, I shall ignore any further uttered muttering of yours … as trollish nonsense.

You may chose to ignore me, equally … and as well.

DWBartoo March 25th, 2012 at 10:52 pm
In response to mswinkle @ 204

Let us consider on further thing, mswinkle. please if we might?

As you know I argue for the necessity of a Rule of Law, since the absence of such a Rule of Law implies the rule of men (or women) subject to no restraint, reason, tolerance, or understanding …

That is TYRANNY … and what we actually now face.

Do you propose to argue that such a Rule of Law is unnecessary?

And, if you agree that it is necessary, then upon what, specifically and precisely, do you intend to build it?

Let me be clear, I hold that the Constitution IS a useful piece of paper that, despite its defects and limitations, despite it usurpation, it codifies that basis upon which a functioning Rule of Law may be premised.

So, if we throw to the winds, the Constitution, what have we in the meantime? What have we to premise OUR legitimate concerns, NOT control, upon … what may we share with others as that underlying, coherent first principle which pdaly has said we cannot, now, concern ourselves with.

What, in a word, shall “constrain” us,? What shall caution us, and serve to rally others to our cause.

Do you propose an alternative?

Once we assert that government has no legitimate, just power, as it operates counter and in opposition to the CONSENT and the WILL of the people, then what have we to attract that consent and that will?

If we are to assert the illegitimate nature of current “Authority”, then what have we to induce or encourage the rise of legitimate, participatory democracy and the means of “the people” to determine their own course through human events, to chart their own destiny?

It would seem that the answer to those questions is requisite … prior to announcing what you propose … call it a mic check … call it considered reason and rational appeal but ponder its importance and central necessity.

DW

mswinkle March 26th, 2012 at 4:14 am
In response to DWBartoo @ 209

Not sure if you will read this but what enshrines the rule of law? does it come from the constitution? or does exist from before then. Was the constitution created before previous rules that governed us were removed? In fact were those rules even removed. In fact what rules do we need? by that I mean is what rules are fundamental so we can enjoy life, liberty, equality, and the pursuit of happiness. assuming that is the basis on which we establish these rules.

and it would seem that if someone were to challenge the existing constitution and all laws therefor passed under it, many in violation of it, you would not support it as you would need to see what will replace it first. And there is the problem, although most know they are living under a system that does not have our consent few will do anything to change that legally challenging it which would open it up to debate. So that leads to the only other option that has been used to mount such a challenge and that is a revolution. The former as it makes it way through the courts opens up the subject to wide debate and allows for alternatives to be presented. The latter tosses it all out, leads to chaos and loss of life, and when it is all said and done often results in a few people getting power and just rearranging deck chairs.

jodo March 26th, 2012 at 5:08 am

The game has been rigged for years. That’s how the oligarchs became so corrupt they blew up the world economy. It’s all about income relative to how much things cost today. My father with two children and one income bought a very nice 4 bedroom home in one of the most affluent counties in America for about four times his middle class salary. Today you couldn’t buy an efficiency condo in this area at four times the middle class salary. Annual tuition at the State University was 4%-5% of middle class annual income. Today you would have to earn $200,000 / year to get the same ratio. It’s the same or worse with energy costs, healthcare, autos.

DWBartoo March 26th, 2012 at 5:48 am
In response to mswinkle @ 210

IT is that period of “transition”, the first part of which, as I have said, repeatedly, mswinkle, which is already well under way … since the end of WW II, the Powers That Be, making use of the primacy of the Executive which was, for all “practical” purposes, “enshrined” by the use of atomic weaponry, and NEVER seriously challenged since … indeed it has been augmented year after year until now … the Executive reigns supreme, above AND, completely and thoroughly, beyond the reach of the law.

This executive over-reach dovetailing with the rise of corporate personhood, a “concept” REPEATEDLY polished and enlarged upon, by a third “branch” of a government, almost from the very beginning, of, by, and for the wealthy elite … which is, hardly surprising as the Justices of the Supreme Court have been either OF the gentry or desirous, in many instances, of securing and servicing the “favor” of that gentry … has, finally, elevated the monied class to the absolute and undisputed “top” of both the power and the money hierarchy.

In the midst of that, the rise of military conquest, again from the very beginning and itself enshrined in the notion, the law and the mythology as legitimate and “just” by, among other things, the Monroe Doctrine AND the Doctrines of every President so “inclined”, culminating in the Bush Doctrine and carried “forward”, enhanced and embellished, by the current administration has brought about the assumption AND the widely held “belief” that the United States may act above and beyond ALL laws and treaties, as it may suit the desired “ends”, Machiavellian as those ends most clearly and certainly are, of the Masters.

The remaining “branch” of the federal government, the Congress, through whose hands ANY meaningful change, under the present, corrupted system MUST either by “moved” or throttled … is acquiescent, complicit, and a means to great wealth … “access” to Congress is also the means by which the wealthy may buy whatever law, or modification to existing law, they wish.

Effectively, all of these things allow and create that two-tiered “justice” system, making complete and total mock of the Rule of Law and of the Constitution.

The Masters will continue to suppress freedom and “opportunity”, they will continue their “wars” of domination and extensive resource “mining”.

Eventually the political economy will collapse under its own weight and violent inertia…

What happens then IS the issue which concerns me and should concern everyone.

What do “we” do “then”?

What will we be prepared to successfully “do”?

What will allow the semblance and the articulation of ANY common understanding if there is NO law and no appeal to the authority of common understanding?

That is why I suggest that unless the model, the means and the method, of “revolution” must be different from usurpation by force and by violence, and not be a product of fear, of murder, of wholesale slaughter … for likely, there will have already been MORE than enough of those things.

What will be then, the appeal of conscience, of reason, unless behavior is already firmly wedded to the concept of non-violence and the evident fact of its essential worth?

If new law, if a new Rule of Law, not a rule of sociopaths, is to arise upon what shall it be premised? It cannot be premised upon unclear and uncertain notions, but must, of necessity, be clear, be obvious, and be simple to grasp, to understand and be honored, to be practiced and to be accepted.

DW

juliania March 26th, 2012 at 7:17 am

mswinkle’s question about the writers of the Constitution took me to a remembered local radio interview with William Hogeland, author of “Declaration”, describing the change of the old order to new in Philadelphia. I did have our librarian order the book – a fascinating tale. Here is a snippet from the Washington Times review by James Srodes:

“What we get is truly delicious political maneuvering of the kind that would make an Obama strategist’s mouth water. Instead of the monumental characters of John Hancock, Thomas Jefferson, James Madison and the rest, we get the plotting Adams cousins and their unlikely allies, the Lees of Virginia, who make a shaky and improbable alliance with a cast of conflicting and conflicted radicals from other colonies, some of whom were not even delegates to the Congress.”

I am truly puzzled that mswinkle seems to want to junk the Constitution. Isn’t that what the corporatists are and have been systematically doing? There is no balance of powers left. Corporations aren’t mentioned in the Constitution as persons – that’s a total perversion of what it was set up to do. The Boston Tea Party was even a revolt against corporate power, as well as monarchical colonization. It seems to me the Constitution is well adapted to our very present situation, since those who put it into law were concerned that it address the same threats we currently face.

It isn’t the Constitution that is causing the rule of law to collapse, because it sets forth what the rule of law should be. We presently see a Supreme Court which overrules the Constitution, an Executive branch which ignores the Constitution, and a Legislature which plays kabuki with the Constitution – and they are all millionaires and billionaires turning the Constitution into just a piece of paper. It has already been junked by these foolish and greedy people.

But it isn’t just a piece of paper. It is the law of the land, not what those charlatans I just mentioned pretend to us it is. So instead of calling it into question, to my mind we need to impeach the lot of them. Using the Constitution, not junking it. ( And by the way, there are no parties in the Constitution – none!)

Sure, the writers of the Constitution were all flawed individuals, but they knew that they were. And I think by and large they were honest men who knew the importance of what they were constructing and did so to the best of their abilities, some of them quite brilliant. I don’t think in this day and age we can do any better – you should be very careful tearing down an edifice that you can build something better in its place, and I don’t think we can do that. Don’t throw the baby out with the stinking bathwater!

Well, I probably have exceeded my allotted space – hope not.

Ludwig March 26th, 2012 at 9:06 am

I’ll probably come off as a harping echo of mswinkle, but I am perplexed by the focus on the Constitution. Just allowing myself a sacrilegious digression here, it seems that the Constitution is the very symbol of our political ineptitude, the nucleus of US power being so unstable that it might split if an electron approached. Oh yes, if only the checks and balances were preserved, etc., if they had honored the wisdom of the founders, the might and tranquility of the empire would have been preserved …

It is numbingly counterfactual, and baffling, as if the constraints violated were so abstruse that the mass of its subjects could not be aroused in their own defense. I say, from a moralist’s POV, that the centrality of the Constitution is an incitement to misconstrue the flawed opportunism despised the world around.

Another interesting aspect to this; a post-mortem would analyze the deviations from goals. But the slavishness to mythos ensnares like professional discretion. The comprador in you cannot be disinterested.

The US government is engaged in a blatant travesty of principle, the example most to the fore being humanitarian intervention via weaponry. But before the misery was brought home, legions of compradors were not only unable to admit the violation of principle but they were unable to see the consequence, nay the pattern, of acts of their government.

Well, most see now. Still, the comprador behavior must continue and we must consent in its approval because it’s in the plan and embedded in the Constitution.

Anyway, that’s one crack at entreaty to the Constitution.

Ludwig March 26th, 2012 at 9:29 am
In response to juliania @ 213

Another approach. You say, juliana, “So instead of calling [the Contitution] into question, to my mind we need to impeach the lot of them.” Well, yes, normally, but there’s a systemic infection. A control fraud at the top.

So in that perspective, one must recognize the failures of the Constitution as well and peer into the abyss, to recognize that DW’s nonviolent revolution would concern itself with the metastasizing anarchy which not only buries that historical instruction but is clearly set on pulping the future.

Is there nothing to appeal to between the Constitution and Gunplay?

juliania March 26th, 2012 at 9:51 am
In response to Ludwig @ 214

Thanks for answering, Ludwig, but I don’t see the Constitution as supporting empire. Seems to me it is a practical document for a democratic republic that historically wasn’t in any position to be thinking about empire, just survival. Empire was what it was devised to replace.

There’s no mythos in the Constitution, seems to me, and it isn’t a very long document, just the bare bones of a political system really. Nothing more than a little book to tuck into the breast pocket of a politician. What makes it a ‘living’ document is that the concerns it addresses are the concerns we have today: empirical goals of the previous regime, corporate dominance over taxpayers and citizens, a rule of law which favored the ‘home’ country over colonists (I am reading “Washington” by Ron Chernow – fascinating.) The bare bones of redress of grievances codified is what I see it to be. Grounded in enlightenment rational thinking, which goes very much along the path of pragmatic idealism if applied correctly and honestly. No mythos there, simply an attempt to countercheck one branch of government against the other two in important ways. The only flaw that I can see is that the founders haven’t provided a remedy for when all three are simultaneously seen to be corrupt – unless it was Jefferson’s idea that revolution would be a cyclical occurrence.

I take your point and agree with it that the present government is ‘engaged in a blatant travesty of principle’ – that principle being, I repeat, the Constitution itself. It never was in the minds of the writers that this country become what it had been under the British rule. Why bother to change an old master for a new at the risk of so many lives if that were the case? Why not simply glom onto the corporate powers of the day? So I disagree that it is ‘in the plan and embedded in the Constitution’. You would have to be a bit more specific and show me how that is the case.

But thank you very much for your response.

juliania March 26th, 2012 at 10:12 am
In response to Ludwig @ 215

We overlapped.

I think DW’s call for a nonviolent revolution could in the abstract marry with my call for the impeachment of all three branches while retaining the substructure the Constitution provides. I am thinking of the huge difficulties faced as the US invaded Iraq and attempted to put a Constitution in place after having destroyed the country.

You ask, “Is there nothing to appeal to between the Constitution and Gunplay?” I submit that there is, in the form of the kind of revolution DW, and perhaps Jefferson too, envisages. In place of the word ‘mythos’ I would substitute ‘tradition’ – a word which has come into some disrepute but which every nation needs to rediscover each for itself, to bind together very different levels of their citizenry. E pluribus unum.

This country has a tradition, a much forgotten and maligned one, that would serve again once the pressures of empire were (as I think is happening) dissolved. We would and will become a country much more like the one we were when the Constitution was written, since we seem to be treading in their very footsteps, than we have been in this militant and military era which I fervently hope is coming to its end. It cannot happen soon enough. I know for me the one positive outcome of our current situation is that those revolutionaries of the past have sprung to life with all their faults and with all their idealism, in a far more vivid encounter than there had been when I thought so highly of ‘stable’ American democracy to become a citizen myself. We will have the opportunity, I hope, to go back to our roots, and that is something I can’t wait to be part of.

Ludwig March 26th, 2012 at 10:25 am
In response to juliania @ 217

I think DW’s call for a nonviolent revolution could in the abstract marry with my call for the impeachment of all three branches while retaining the substructure the Constitution provides. I am thinking of the huge difficulties faced as the US invaded Iraq and attempted to put a Constitution in place after having destroyed the country.

I’m sorry, that comparison between revolution and invasion is so off-putting I don’t think I’m even interested to proceed.

DWBartoo March 26th, 2012 at 10:37 am
In response to juliania @ 213

Very well said.

DW

pdaly March 26th, 2012 at 4:06 pm
In response to juliania @ 213

Nicely said.

And a reminder to everyone, corporations grow their umbilical cord from state law, not federal law.

juliania March 26th, 2012 at 7:02 pm
In response to Ludwig @ 218

Gee, I thought “the metastasizing anarchy which not only buries that historical instruction but is clearly set on pulping the future” would have steeled you against my juxtaposition, Ludwig. But maybe you misunderstood what I was trying to say; apologies if I wasn’t clear. To restate, things are easier to break than they are to put back together, shock doctrine notwithstanding. Thanks for the conversation.

[And thanks guys, very much. Things are starting to happen on the state level, aren't they? We almost got big box stores to pay their share of taxes in NM - Governor had to go out on a limb and veto it; she'll regret that I'm thinking.]

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