SubPriming the Pump
by Greg Moses
Now that bankers of the world have been knocked sideways by American workers in pain – a phenomenon that goes by the name of the “subprime lending crisis” — will the bankers try to fix living conditions for people who make up the subprime base of the global economy? The answer of course is fat chance.
Having once again subprimed the pump of the global economy upon the backs of the most marginalized classes, the banker-driven conversation these days would have us forget the people whose feet are sliding and focus instead on questions of monetary policy. This is globalization as ideology, a mind-framing game that squeezes all it can from flesh and blood workers while denying their basic human value.
Asia Times economist Chan Akya, for example, admits that globalization has allowed bankers from Beijing, Geneva, and Los Angeles to simultaneously milk the labor of Mexican migrant workers in the USA. And he concurs with global consensus that hard times among subprime workers in the USA is the effective trigger for global market tremors. But with a cynical conclusion, he isolates the real pain of “subprime” humanity as a costly political problem to be laid at the feet of the USA administration, and encourages Asian-sphere financiers to turn their investments inward.
Akya’s conclusion is cynical because what remains untouched is the presumption that globalization should continue with top-down arrogance. He gives us no reason to believe, for example, that the increased bargaining power of newly withdrawn Asian financiers will be put to work on anyone’s behalf but bankers who are now able to throw pretty lights upon Tiananmen Square.
And Akya fails to make plain how much Asian bankers owe to American subprime workers who this past decade have been trading with China on a daily basis at Wal-Mart. In sum, Akya’s economics is seedling to the next world war, which is what happens when financiers draw lines between each other on a map.
A lot can be learned about the “subprime” crisis by browsing the abstracts of the Fannie Mae Foundation’s Housing Policy Debates (HPD). There we learn that subprime lending is shorthand for new racism in banking. Instead of “redlining” neighborhoods filled with struggling workers of color, bankers have for the past decade “subprimed” them — giving credit to these working poor at predatory rates (cf: Wyly HPD 15.3).
At the turn of the century, 16.8 percent of households in the USA lived in “housing induced poverty” – the kind of poverty that can be caused by predatory mortgage rates (Kutty HPD 16.1). At any point in time, social investment into these households could have slightly relieved the pain of inequality through housing-allowance entitlements, job improvements, or human rights (cf: Priemus HPD 16.3,4).
In fact, affordable housing helps to grow healthier children (Newman HPD 16.2), which is another way of saying that today’s predatory lending is already replicating tomorrow’s fukked-over class. Is it any wonder therefore that subprime borrowers tend to be disenchanted with the home-owning experience?
The global lesson to be drawn from the subprime crisis is that bankers should be made to take interest in human development, not simply be allowed to extract interest from it, as they build their houses of cards. Or to put it another way, in a globalized world, banking policy is public policy. And public policy has no business taking lessons from predatory economic theories.
Bank bailouts, says Akya, can only damage the image of government. But bank bailouts in the form of mortgage vouchers given to “subprime” working peoples would surely bring us one step closer to globalization with a human heart.
Issuing housing allowances as entitlements has been tried in the Netherlands, and apparently it works well there (Priemus HPD 16.3,4). People who are secure in their housing are people who can afford to dream of better days to come, and such hope does good things for workers, their children, and — do we have to say it? — their employers, too.
Whether you belong to a Party that calls itself Republican, Democrat, or Communist, you could find some way to honestly repay subprime workers for carrying your whole world on their backs these past few years.