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Debtor"s Prisons and Corporate Slave Masters

Better be ready with that degree that will get you the burger flippin job.

Free yourselves and rise up against Corporatism!
An Indebt Society is an Enslaved Society
An Indebt Society is an Enslaved Society
Student loans a ticket to debtor's prison?


Nancy Fay

1/22/2006 6:45:22 PM

Student loans used to be the way to a better life through a better education. Today, more and more borrowers in the Temecula Valley are regarding them as a ticket to debtor's prison.

Last month, the Supreme Court ruled that the federal government can garnish a student loan borrower's Social Security check if he defaults on his guaranteed loan. That is in contrast to other loan obligations that may not be forgiven but are "written off" after a seven-year period in default and cannot be collected through wage garnishment.

"It gets even worse," said Karen Pankowski, a teacher who lives in Temecula. "Student loan rates are going up and terms are getting much more difficult. They think they are going to lower the federal budget deficit by making loans more expensive and harder to repay, but they are wrong. It will have the opposite effect and cause more students to default, and that will really hit the federal treasury hard."

The new rules regarding student loans are part of a deficit reduction plan recently passed in Congress. Check the Web: More and more students are getting angrier and angrier about their student loans.

They don't mind paying them back. They just don't like it when people change the rules in the middle of the game.

"Congress enacted new rules that continue the so-called 'Single Holder Rule,' which says that once you take your student loans out from one lender, you cannot change that lender," said Alan Collinge, founder of Student Loan Justice. "And if you want to refinance to take advantage of historically low interest rates, you can only do that once, if at all. And you can no longer do it while in school. Imagine the outcry if America's largest mortgage lenders tried to stifle competition by restricting the way we refinance our home loans."

Yet America's largest student loan banker did exactly that, and justified it by saying that competition for student loans would hurt its student loan portfolio.

Tracey Vackar, a member of the Moreno Valley Unified School District, has seen student loans from three sides: her own, those of two children and those of the thousands of students who graduate every year from her school district.

"Student loans are now a big business," Vackar said. "The biggest company, Sallie Mae, holds $120 billion in student debt, pays CEO salaries of $30 million and more and carries an official designation as the second most profitable company in America."

The secret of Sallie's success is simple: It has a captive audience. Once you take a student loan out from Sallie, it is almost impossible to switch your loan to another company if you want to refinance it. And you are only allowed to refinance once, no matter how low interest rates go. No matter how much more you have to pay in higher interest rates.

And new legislation made it worse: Deep in the recesses of the well publicized legislation to raise the cost of a student loan are provisions to prevent student borrowers from moving their loans to lenders offering better terms. The new deal also eliminates repayment schemes that are based on ability to pay. So not only are loans more expensive, they are harder to pay back.



Slave Labor: Made in the U.S.A. (Excerpt)
by William Norman Grigg
February 6, 2006
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Under the influence of disgraced super-lobbyist Jack Abramoff, former House Majority Whip Tom DeLay became an apologist for slave labor camps on American soil.
Deep in a humid tropical island jungle, in poorly ventilated buildings ringed with barbed wire and patrolled by armed guards, impoverished Asian women most of them Chinese toil for 80 hours a week making brand-name apparel for export to the United States.

The female garment workers were lured to the labor camps, which are run by members of the Chinese Communist Party, with promises of wages extravagant by their standards, up to 60 percent of what their counterparts in the U.S. earn. But before they were hired, the women had to sign "shadow contracts" that effectively made them slaves to the company. Their activities are strictly regimented, and since they depend on the company store for most of their necessities, what they earn is recycled back into company hands. Furthermore, most of the workers had to borrow huge sums of money, at extortionate rates of interest, to pay, up front, the human traffickers responsible for transporting them to the island.

As is the case wherever the Chinese Communist Party claims jurisdiction, the female garment workers are subject to the regime's repulsive one-child policy. They are forbidden to marry or have boyfriends. Those who become pregnant are forced to have their children aborted.

Despite being produced from Chinese fabric by Chinese laborers who labor under Chinese law, the designer clothing that emerges from those island factories is labeled "Made in the USA." This is actually a case of truth in labeling, since these Chinese labor camps were established on Saipan, a territorial possession of the United States. Thanks to the efforts of super-lobbyist and confessed felon Jack Abramoff, this squalid arrangement has enjoyed political protection from, and been effusively praised by, many "conservative" Republican politicians, including disgraced former House GOP leader Tom DeLay.

GOP Chinagate

The Northern Mariana Islands, a Pacific archipelago located about three-quarters of the way from Hawaii to the Philippines, were acquired by the United States from Japan following World War II. Saipan, the largest of the 14 Marianas, serves as capital of the Commonwealth of Northern Mariana Islands (CNMI) and the center of its $1 billion garment industry.

During the mid-1990s, Saipan was also a very popular tourist destination for junketeering congressmen, as well as for journalists, analysts for Washington-based think tanks, and other key opinion molders. Many of them were brought to Saipan by Jack Abramoff, who until recently was the King of K Street the boulevard that serves as a staging base for the estimated 50,000 lobbyists infesting our nation's Capitol.

Since Saipan is a tropical white-sand paradise, Abramoff, representing the CNMI, encountered little difficulty persuading influential people to take all-expenses-paid trips to the tropical island. Once there, they were lobbied by the CNMI government and its allies in the garment industry to preserve its unique status under U.S. law. Among the privileges reserved to the commonwealth were the right to set its own immigration policy, exemption from labor and workplace safety regulations, exemptions from tariffs and quotas, and the right to label as "Made in the USA" goods that are manufactured by Chinese workers in factories that are, in effect, pockets of Chinese sovereignty.

"There is no doubt that trips to the CNMI are one of the most effective ways to build permanent friends on the Hill and among policy makers in Washington," boasted Abramoff in a 1998 memo to his associates. Perhaps the most significant of the "friends" cultivated by Abramoff on behalf of CNMI was former House Majority Leader Tom DeLay (R-Texas). In the company of Abramoff, DeLay spent his 1998 New Year's vacation on Saipan as a personal guest of Chinese business mogul Tan Siu-lin.

During a lavish New Year's Eve dinner held in his honor at the beach front Hyatt Regency Hotel, DeLay praised Saipan as "my Galapagos Island ... a perfect petri dish of capitalism." He singled out Froilan Tenorio, at the time the CNMI's governor, praising him for being "a shining light for what is happening in the Republican Party, and [for representing] everything that is good about what we're trying to do in America, in leading the world in the free market system."

While DeLay never distinguished himself as an economist or scholar, it's likely that he understood that selectively exempting politically protected manufacturers from regulations and taxes is corporatism, not free-market capitalism. It's likewise a safe bet that he understood that a free market is not built on slave labor. And as one of the most conspicuous leaders of the Christian Right, DeLay certainly understood that abortion particularly forced abortion is an abomination. Yet all of these repellent practices thrived in the Saipan "petri dish" that so enchanted DeLay.

Had DeLay and the scores of other congressmen who visited Saipan on junkets been truly interested in deregulation, they would have directed their efforts at freeing up the entire U.S. manufacturing sector, rather than conferring such favors on Saipan alone. The sordid truth revealed in this episode is that the power brokers have corrupted our political system to such an extent that it now operates in many ways like a classic protection racket. By giving the political class a share of the boodle, the CNMI and its corporate allies were able to profit handsomely as was the key influence broker, Jack Abramoff....To continue reading the complete article, place an online order for a PDF version of the February 6th issue of The New American, and get instant access to the full-text of this article along with the full-text of all the other articles in the same issue. Similarly, if you place an online order for one or more copies of the print version of the February 6th issue, you'll receive a complimentary link to the PDF version of that issue, also giving you instant access to the full-text of the "Slave Labor: Made in the U.S.A." article and all of the other articles in that issue.