The golden age of unsolicited credit-card applications ended about five years ago. It must have been a relief at the post office. At least ten envelopes came each week -- often with non-functioning replica cards enclosed, to elicit the anticipatory thrill of fresh plastic in the recipient’s hot little hand.
For a while, I would open each envelope and carefully shred anything with my name on it, lest an identity thief go on a shopping spree in my name. But at some point I gave up, because there were just too many of them. Besides, any identity thief worth worrying about enjoyed better options than trash-diving for unopened mail.
Something started happening circa 2006 or ’07. More and more often, the very envelopes carried wording to the effect that approval for a new card was a formality, so act now! With the benefit of hindsight, this reads as a last surge of economic acceleration before the crash just ahead. But at the time, I figured that credit-card companies were growing desperate to grab our attention, since many of us were throwing the offers away without a second glance.
The two alternatives -- turbocharged consumerism on the one hand, the depleted willingness (or capacity) of consumers to take on more debt, on the other -- are not mutually exclusive. It was subprime mortgages rather than overextended credit cards that brought the go-go ’00s to an early end, but each was a manifestation of the system Andrew Ross writes about in Creditocracy and the Case for Debt Refusal (OR Books).
Ross, a professor of social and cultural analysis at New York University, was active in Occupy Wall Street, and Creditocracy bears a few traces of the movement, both in its plainspoken and inclusive expressions of anger (this I like) and its redeployment of old anarco-syndicalist ideas (that, not so much).
One commonplace account of the near-collapse of the world financial system in 2008 is that it was the product of consumer hedonism at its most irresponsible. It was just deserts for people playing Xbox on jumbo flat-screen TVs in subprime-mortgaged houses they shouldn't be in. Whatever the limits of its explanatory power, this interpretation allows for a pleasing discharge of moralistic aggression. Hence its popularity. The most familiar argument opposing it places the blame, rather, on bankers, brokers, and other criminals “too big to jail.” It was they who were greedy and short-sighted, not average people.
Besides the more obvious similarities, what these explanations share is an implication that the disaster could have been avoided with some self-discipline and the understanding that hyperbolic discounting is a very bad habit.
Ross leans in the anti-plutocratic direction, but he proves ultimately less interested in the morality of anyone’s decisions than he is in the framework that permits, or demands, those decisions in the first place. The system he calls “creditocracy” turns out debt as fast and efficiently as Detroit once did automobiles, and just as profitably:
“Financiers seek to wrap debt around every possible asset and income stream,” he writes, “ensuring a flow of interest from each…. [T]he tipping point for a creditocracy occurs when ‘economic rents’ – from debt-leveraging, capital gains, manipulation of paper claims through derivatives and other forms of financial engineering – are no longer merely supplementary sources of income, but have become the most reliable and effective instrument for the amassing of wealth and influence.”
At that level of description, Ross has simply given a new name to what Rudolf Hilferding, writing a hundred years ago, called “finance capital.” But what Hilferding had in mind was the merger of banking and industrial capitalism – the marriage of big money and big factories, with monopoly presiding. Creditocracy, by contrast, “goes small,” insinuating itself into every nook and cranny of life. The relationship between creditor and debtor takes many different shapes, some more overt than others.
When you take out a student loan or a mortgage, your submission to the financial system is more or less deliberate, and in any event explicit. It runs deeper, and proves less purely voluntary, if you have to use credit cards in lieu of unemployment insurance. The credit relationship is much more efficiently disguised if it takes the form of an unpaid internship – the “exchange” of your time and skills for intangible and impossible-to-quantify credit” toward a future job, if you’re lucky.
And if that doesn’t pan out, you might end up working in one of the less desirable positions at Walmart or Taco Bell, among other corporations that banks have persuaded, Ross writes, “to pay their employees with prepaid debit cards that are only lightly regulated.” The banks then “charge the users fees to make ATM withdrawls and retail purchases, along with inactivity fees for using their cards. Almost all of these are minimum or subminimum wage employees, compelled to fork over a fee to enjoy their paycheck." (The practice was described in a New York Timesarticle a few months ago.)
In next week’s column, I’ll consider Ross’s analysis of how the impact of creditocracy on education amounts to a ruthless exploitation, not just of present-day society, but of the future. We’ll also take a look at the comparable argument in a new book called The Falling Rate of Learning and the Neoliberal Endgame (Zero Books) by David J. Blacker, a professor of philosophy of education and legal studies at the University of Delaware.
Until then, I’ll sign off by mentioning that someone has just sent me an application for a $40,000 line of credit. This must be evidence of that “recovery” one reads about. If so, we’re in real trouble.
Larry James, a former Army psychologist and associate vice president for military affairs at Wright State University, won't be invited to campus to interview for a position at Northern Arizona University, a spokesman said late Tuesday. The announcement came after a week of protest from students and faculty over the fact that James was in the running to become the new dean of the College Social and behavioral sciences. Protesters raised concerns about his role as a process evaluator for interrogations at Abu Ghraib prison during the Iraq War and at the military detention center at Guantanamo Bay. Many of their concerns came from James's own book, Fixing Hell: An Army Psychologist Confronts AbuGhraib. In that book, and in various interviews, including one last year with Inside Higher Ed, James says he witnessed abusive behaviors by both prisoners and U.S. military personnel, but that he worked to make the situation better. James was assigned to the prison only after the initial revelations about the abuses at Abu Ghraib and his job was to assess and recommend procedures to prevent future abuses. But some critics said his association with the prison is enough to make his appointment to an academic post inappropriate, and others challenged his explanation and the findings of several independent investigations that James was not party to the abuses at Abu Ghraib. They point to a 2010 complaint filed with the Ohio State Board of Psychology by the International Human Rights Clinic at Harvard Law School alleging that human rights violations continued after James arrived.
Protesters called for university to block James from coming to campus to interview. In an open letter to students and faculty posted on the university website this week, Laura Huenneke, provost, and Dan Kain, vice provost for academic personnel at Northern Arizona said: "Sadly, some individuals (including students) are seeking to prevent his interview and visit. Intimidating flyers are being posted anonymously, and messages have been flying around campus urging people to 'check out' the person via Google or other quick web searches. This behavior is inconsistent with the university’s commitment to civil discourse and fair evaluation of individuals. Indeed, our search process has consistently instructed committee members NOT to search the Internet to learn about candidates, both because of the inaccuracies promulgated on the web and because of the potential for discrimination. Our process is built around our deep respect for giving everyone a fair chance in the hiring process."
In response, Romand Coles, professor of community, culture and environment, posted his own letter, saying: "The concern for evidence-based investigation, accurate representation of what we know, and our best efforts at reasoned deliberation are values I too hold to be absolutely vital to the scholarly enterprise and democratic discourse. Yet based on these standards I come to a very different conclusion about the character of the conversation and work that has been conducted around this search thus far."
On Tuesday, a spokesman said via email: "Dr. James’ leadership skills and record of accomplishments in higher education made him a strong candidate for this position. In searching for a dean, NAU's goals include finding the right match between a candidate’s skills and the college’s needs. After extensive discussions on campus, Dr. James’ candidacy will not be pursued and he will not be visiting campus."
James also sparked student protests and raised faculty concerns last year during his candidacy for division executive director in the College of Education at the University of Missouri at Columbia. He did not get the job, but neither did the other finalist. The post went unfilled.
James did not immediately respond to a request for comment. Coles did not offer additional comment.
Tom Snyder, president of Ivy Tech Community College in Indiana, was among several business leaders and policy experts to testify before the House of Representatives Ways and Means Committee Tuesday on the effects of the Affordable Care Act's so-called employer mandate. The law requires large employers to provide health insurance to employees working 30 or more hours per week, or face fines. Snyder said that the college already had reduced some adjuncts' hours and had to compensate by hiring others in anticipation of the law taking effect in January. Many other colleges and universities have done the same during the past 18 months, capping adjuncts' maximum course loads to ensure that aren't full-time, benefits-eligible employees under the law.
"Because of the unique role of the adjunct in the community college, the end result may be less access for the students and the inability of faculty to stay with one college,” Snyder said, noting that adjuncts' hours include not only contact time with students but also preparation time outside of class. The president said Ivy Tech supported the idea of expanding access to health care, but that it would cost the college system up to $12 million annually to provide all its employees working 30 hours or more weekly with health insurance.
Maria Maisto, president of the New Faculty Majority, a national adjunct advocacy group, testified in November to the House Education and the Workforce Committee about how institutions' responses to the law were hurting adjuncts. She was not invited to Tuesday's hearing.
Via email, she said: "The problem with colleges like Ivy Tech doing it is that they are not putting the mission of education first. The mission of higher education is not to figure out ways to cut costs by cutting faculty-associated costs; the mission of higher ed is to invest in the people who make education happen -- the teachers and the students."
The New York Senate has passed legislation that would bar public or private colleges in state from using state funds to fund groups that support academic boycotts, The Albany Times-Union reported. The bill is designed to take a stand against the American Studies Association, which has voted to back a boycott of Israeli universities. Many defenders of academic freedom -- including those who have said that the American Studies Association move amounts to an attack on academic freedom -- have criticized the New York bill.
Journalist, biographer, and Aspen Institute Chair and CEO Walter Isaacson will deliver the 43rd annual Jefferson Lecture, the National Institute for the Humanities announced Tuesday. The lecture is the federal government's top honor for scholarship in the humanities.
Isaacson has written a number of widely read biographies, including the 2011 international bestseller Steve Jobs. Previous books focused on Henry Kissinger, Albert Einstein, and Benjamin Franklin, among others. Before becoming chair of the Aspen Institute, an educational and policy studies organization, he was chairman and CEO of CNN and editor of Time magazine. Isaacson will give his lecture, "The Intersection of the Humanities and the Sciences," on Monday, May 12th, at the John F. Kennedy Center for the Performing Arts in Washington, D.C.
In today’s Academic Minute, Roberta Golinkoff of the University of Delaware explains why playing with blocks could give your child a better chance developing math skills. Learn more about the Academic Minute here.