Thursday, September 08, 2005



Progressives-- or at least some of them-- fought, and lost, the bankruptcy bill. So why revisit it now: Katrina. After every major natural disaster bankruptcy rates have gone significantly higher (and if you had been listening to the Republicans and their corporate sponsors you probably would have thought, incorrectly, that bankruptcies are a result of undisciplined people-- minorities-- going on a credit card-fueled spending binge at WalMart. More about that below, I guarantee you.) The problem we, as a nation, a society, have to face now-- today-- is that while Bush and the Republicans in Congress are busy trying to rush through more tax cuts for billionaires, unless changes are made to credit card company-written bankruptcy law, a nightmare scheduled to kick in in time for Halloween, many of those economically flat on their backs from the impact of Hurricane Katrina, Bush's feeble and incompetent response and the preventable resultant floods will have a significantly harder time winning court relief from loans they incurred for homes and businesses that are now floating in the Gulf of Mexico. It is widely agreed that if the new law is implemented, it's going to be a lot harder for Katrina's and Bush's victims to put their lives back together and get a fresh start.

Democrats-- an inordinately large number of whom (like Louisiana's Landrieu and Joe Biden) voted to pass this awful bill a few months ago-- are going to propose legislation this week to delay the implementation and to ease off on some of the more onerous pieces. The Republicans will never let this happen-- they owe the credit card companies too much in campaign funding-- and when Democrats originally tried to get exemptions for flood victims, Republicans voted it down overwhelmingly.

The academic studies by University of Nevada law professor Bob Lawless have been given widespread coverage, far more widespread than these kinds of studies normally get. He looked at
the 18 hurricanes and tropical storms since 1980 that caused a billion dollars or more in damage in the U.S. He studied the pattern of bankruptcy filings in the states where the storms made landfall and compared that with patterns in surrounding states and the rest of the country. He looked at the effects in the first, second and third year after the event. The findings are intuitive- unless you've had a drink of GOP punch-- bankruptcy filings climbed in landfall states at more than 1 1/2 times the pace of unaffected states and remained stuck at that rate for 3 years.

A former Republican congressional staffer and bankruptcy expert, now a professor at UCLA, Kenneth Klee, explains that this law "is premised on the notion that we're all authors of our own economic fates." But, he explains, "there are periodic catastrophic incidents that can strike any of us at any time and any place and deliver economic ruin." Government should be there to ameliorate that, not make it worse. And although the credit card companies and their wholey-owned Republican legislators (and more than a handful of Democratic sell-outs as well-- Biden and Lieberman, being two prominent ones), have spent tens of millions of dollars in lobbying and "marketing" to have us believe that most people who need to file for bankruptcy are "bad" and need to be punished, medical bills and other financial effects of illness or injury contributed to nearly half of the more than one million personal bankruptcy filings in the United States last year. Single women and families headed by women, as well as the elderly, were most likely to be driven into bankruptcy by medical problems. Alimony claims are involved in nearly a third of all bankruptcy cases—half being women driven into bankruptcy by unpaid alimony. The Republican legislative leadership, and go-along-for-the-ride Democrats, should have taken factors like these, as well as natural catastrophes like Katrina when they first crafted this horrible law-- which was made to serve the interests of the credit card companies, protect the interests of the very wealthy and of large corporations, and to penalize the most financially vulnerable among us. There's neither a Republican nor a corporate DLC-Democrat who should be re-elected in 2006. They stink worse than the waters that have swallowed New Orleans.


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