FAIR MONEY

Face to Face with Inequality

Monthly Archives: May 2013


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The Spirit of Indenture

Jeffrey Williams, a professor of English and literary and cultural studies at Carnegie Mellon, compares student loan debt to indentured servitude. Here’s the pith of his argument:

“the growth in debt has ushered in a system of bondage similar in practical terms, as well as in principle, to indentured servitude. The analogy to indenture might seem exaggerated but actually has a great deal of resonance. Student debt binds individuals for a significant part of their future work lives. It encumbers job and life choices, and it permeates everyday experience with concern over the monthly chit. It also takes a page from indenture in the extensive brokerage system it has bred, from which more than four thousand banks take profit (even when the loans originate with the federal government, they are still serviced by banks, and banks service an escalating number of private loans).”

It struck me how we would be reflexively outraged by 17th-century forms of indentured servitude, but we are pretty accustomed to modern versions of it, to the point of having to work at seeing it clearly.

A summary of Williams’ argument is available for free, while the full article is harder to lay hands on.


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Organized Money

In his new book The Unwindings, George Packer talks about “the default force in American life, organized money.” That rings so true and is so elegantly put, I felt compelled to look it up. In fact, it appears, FDR originated the phrase “organized money” and said it was as dangerous as the mob. I think we now know it is actually more pervasive and more destructive, but it certainly is interesting that the threat was apparent in 1936.


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Homeless in Silicon Valley

Moyers & Company aired a segment on homelessness in Silicon Valley this April. Moyer’s observes in the prelude:

California’s Silicon Valley is a microcosm of America’s new extremes of wealth and poverty. Business is better than it’s been in a decade, with companies like Facebook, Google and Apple minting hundreds of new tech millionaires. But not far away, the homeless are building tent cities along a creek in the city of San Jose. Homelessness rose 20 percent in the past two years, food stamp participation is at a 10-year high, and the average income for Hispanics, who make up a quarter of the area’s population, fell to a new low of about $19,000 a year — in a place where the average rent is $2000 a month.

All of the above is true, but it doesn’t capture the full range of economic inequality in Silicon Valley. The phrase “hollowing out the middle” Moyer’s discusses further on is more accurate. That term describes a process which has largely gone unseen and unheard in Silicon Valley, but which affects people across a surprising range of income brackets and occupations. Over the course of the Fair Money project we found people struggling at income levels in the six figures as well as at income levels far below that level. Homelessness is up in Silicon Valley, but homelessness is only the most visible example of a more general process.

Nor does Moyer’s segment do justice to the ingenuity and innovations deployed by those facing harsh economic realities. People do not passively accept their circumstances; they actively transform them. While the phrase “hollowing out the middle” and the signs of homelessness grab headlines, the process of filling in the gaps and getting on with living is a hopeful accompaniment.


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Rising Poverty

The Brookings Institution just released a report showing a 64% increase in poverty in suburban America between 2000 and 2011. (While the headline focuses on the suburbs, the cities saw a 29% rise in poverty, which by any reckoning is newsworthy in itself.) An infographic offers a quick synopsis, which talks about implications in terms of policy (mentioning schools and transit). The implications for the people in question undoubtedly are much more complex than that.


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The Student Loan: Grim Reaper of Hope

The Huffington Post reports some jaw-dropping numbers for projected profits from student loans in May 14 article entitled Obama Student Loan Policy Reaping $51 Billion Profit:  “The Obama administration is forecast to turn a record $51 billion profit this year from student loan borrowers, a sum greater than the earnings of the nation’s most profitable companies and roughly equal to the combined net income of the four largest U.S. banks by assets.” The whole article is a must-read


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The Lure of Stuff

A.O. Scott has an article about recent movies celebrating luxury goods, which offers an explanation of some of the behaviors we have seen in our research. Scott doesn’t offer any of the knee-jerk judgments about materialism that we are all prone to, at the same time that we feel the lure of beautiful things. Holding back the judgment is undoubtedly key to defining and building structure around what we want and may not be able to afford. The piece also reminded me of the work of Daniel Miller, who has studied the meanings of our stuff for a long time and concludes that the ability to find meaning in things is strongly connected to our ability to find meaning in relationships to other people. In The Comfort of Things, he writes “All my academic studies have shown that the people who successfully forge meaningful relationships to things are often the same as those who forge meaningful relationships with people, while those who fail at one usually also fail at the other, because the two are much more akin and entwined than is commonly appreciated.”