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Debt-Bondage And The Elephant In The Room

Posted: 2010-02-16
From: Mathaba
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A Greek Tragedy Played Out Between Coronation Street And Haiti


Alexander Baron

Occasionally, when they are not pandering to the lowest common denominator by portraying rape, murder, arson, drunkenness and paedophilia, Britain’s soap operas make a socially useful point or two. Over the past few weeks a Greek tragedy has been played out in the longest running such soap, Coronation Street.

Although the scriptwriters are undoubtedly blissfully unaware of its significance, their timing is an act of Providence, coming as it does in the wake of both the terrible human suffering in Haiti and the growing debt crisis in the sovereign nation of Greece. The minutae of the plot are not important, but it begins when a character named Joe, a skilled tradesman, borrows two thousand pounds from a loan shark. Obviously, such lenders charge higher rates of interest than the banks, but as loan sharks lend real money – rather than create it out of nothing as the banks do – this is to be expected.

In spite of the high interest rate, Joe is happy to borrow the money and to meet the repayment schedule, until bad luck strikes, he injures his back and can’t work, so his income dries up. Add an addiction to painkillers and other problems – such as being laid off permanently – and suddenly he has real problems, which only get worse when a formidable looking character named Rick turns up and announces that he has “bought” Joe’s debt off the original lender.

This is a practice which occurs in the real world too; companies sell debts – real and imagined – to other parties, including debt collecting agencies – who then pressurise the debtors into repaying, often with threats of legal action.

In the real world too, such threats can sometimes include illegal action, and that is what happens in Joe’s case. Joe starts off by giving this thug his van, but the demands keep coming, so he tries to scam some acquaintances – who don’t take the bait – but he does con four thousand pounds out of his future father-in-law, and, taking this to Rick, does his best to put on a brave face. This is the end, he says, no more. Rick agrees, but shortly turns up at his Joe’s wedding reception (which of course is held in a local public house) and demands another five thousand – ten weekly payments of five hundred pounds – and added interest if he defaults. Also, if he defaults, Rick can’t be responsible for the safety of Joe’s daughter.

At this point, most reasonable people would have gone to the police; many people being not so reasonable would have whacked Rick over the head with a beer bottle or worse and taken their chances, but Joe being a total wimp, acquiesces, and works out an insane plan to fake his own death.

Having taken his new wife to a Lake District retreat, he tells her about his plan, assuring her that after seven years she can collect the life insurance, meet up with him in some exotic land and live happily ever after. As might be expected she freaks out. Like Joe, this is not her first marriage, and among other things she already has her hands full with her wayward youngest son.

The couple argue, he decides to present her with a fait accompli, and takes a boat out onto the lake alone at night. Unfortunately, he ends up not faking his own death but causing it. When his wife wakes up alone the following morning, she thinks he has gone ahead with the plan, phones her son and tells him to come up to meet her, pronto. Which he does, and like his mother, being none the wiser, tells her to call the police – probably the only intelligent thing he has ever done in his life. Unfortunately, she doesn’t, and that is as far as the story has got to date. It doesn’t take much imagination to see two likely continuations - Joe’s body will be washed up, and poor wifey will be accused of his murder, or the wicked Rick will turn his attentions to her. It may be that both these things happen – especially as Coronation Street is locked in a viewers’ ratings war with the BBC’s EastEnders.

As I said, this is a sad tale, but Joe had only himself to blame for his demise. One can’t really condemn him for taking out the initial loan, but he should never have allowed himself to be intimidated by a thug, who had no proper legal claim to the debt. And he should have realised that – as the saying goes - once he had paid the Danegeld, he would never get rid of the Dane.

Joe’s debt was irredeemable, as Rick had always intended it to be, and as in the real world of banking, it was a debt that had been conjured up out of thin air. At the time of writing, the Greek Government is facing a similar crisis; it hopes to solve this – or wriggle out – by imposing cuts in public services and reducing the standard of living of its citizens for a prolonged period, and by borrowing money from the European Union, in other words from the oppressed taxpayers of other nations.

Like the hapless Joe, Greece is in danger of being drowned by its debts because it doesn’t have the courage to do what Joe should have done but did not. It must say “No mas”.

The G7 group of nations has just written off massive debts owed by the earthquake hit island of Haiti. Most of this debt, like the debt owed by Greece, consists of interest payments, interest is piled on interest. Writing it off will hurt no one, no one who matters, no one who can’t afford it. The international banks have as much right to demand and receive their multi-billion dollar debt “repayments” as the thug who drove a man to his death in Coronation Street. Like him, they are charging real interest for an imaginary debt, a debt that can never be repaid.

What are the chances of this coming about? Will Greece stand up to the Money Power? How can Greece if Britain won’t, if even the people who control the purse strings of this once great nation refuse to confront, or even to admit to, the real problem?

Recently, the current writer contacted the Treasury asking the Financial Secretary and Chief Secretary one very simple question:

Much has been made of late of the supposedly newly discovered quantitative easing - the process of creating money out of thin air and giving it to the banks in order for the banks to lend (ie sell) at interest to industry, entrepreneurs and small businesses at their whim.

Would it not make much more sense for the Government to create this money and lend it direct at low or no interest to the same parties thereby saving time, effort and expense?

This process was recommended by the Australian Royal Commission on Money as long ago as 1937.

****************************************

Financial Secretary Stephen Timms replied a few days later:

Dear Mr Baron
Thank you for taking the trouble to draw this point to my attention.

****************************************

As one of the editors of Mathaba commented, this non-response is as good as an admission that they have no answer.

The law provides protection from harassment by oppressive creditors in the form of bankruptcy. In recent years, the bankruptcy laws have been liberalised, and along with voluntary agreements with creditors, they have all but taken the stigma out of it. Indeed, even before the new reforms, bankruptcy was not only used by the vulnerable but exploited by the criminal. An all too common scenario is that a company would be started up to produce or market some product(s) or service(s) perhaps of doubtful quality or use, run into difficulties almost at once, go into liquidation, the creditors would walk away with a penny in the pound, and a few months later the same people would start up a similar scam.

Bankruptcy may still hold some stigma for the individual, but stigma is not a bad alternative to a mountain of irredeemable debt on one’s back, or the backs of ordinary working people everywhere.

The Greek Government, the British Government and governments worldwide must recognise this problem, the real problem of this absurd irredeemable debt, and deal with it. Not by increasing taxes – stealing from the people – or by other subterfuges such as inflating the currency, but by cancelling the debt. Unless and until that happens, we will all be the slaves of Mammon. But perhaps that is what Boris Johnson’s “Masters of the Universe” intend.

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