The Automatic Earth

Alexis Tsipras on the left, PASOK Chief Evangelos Venizelos on the right

Athens News Live Blog: 9.30pm After his attempts to form a government, the Syriza leader, Alexis Tsipras, has said he will hand back the exploratory mandate to form a government to the president at 1pm on Thursday, since the creation of a coalition government was not made possible.

Tsipras, addressing the first session of the party’s new parliamentary group, the members of which he called “comrades”, he said that it was clear that Syriza’s proposals “had broad social support but weak parliamentary support”. “We cannot make our dream for a government of the left a reality; we shall continue, however, to be in the front line of the struggle,” he added.

Tsipras said that not all was lost and that the party had succeeded in getting its message out there: “The new [austerity] measures and how they can be pushed through parliament are no longer in the spotlight. We have forced a discussion on our policies, which were backed by the people at the polls, and this is a great victory.”

Via Ekathimerini:“I call on all the political forces of the center-right, those who entered and those who remained out of Parliament, to set aside personal differences and party rivalry to protect the rights built up over the last few decades,” said Samaras.

However, by last night there had been no positive responses to Samaras’s call. “I do not think Mr Samaras can be trusted to pull something together at a time when New Democracy is falling apart,” said Manos, who said it would be much easier for his party to join forces with Democratic Alliance.

Karatzaferis was also dismissive of a return to ND, which he considers the home of two MPs – Adonis Georgiadis and Makis Voridis – who “betrayed” LAOS when they joined the conservatives.

Twitter Update: The #coalition parties keep hitting us with the danger of us exiting the #euro but their policies have cost us 75mil euro #Tsipras

According to Bloomberg flashes, Alexis Tsipras, head of the left-wing, anti-memorandum Syriza party, has just said he will NOT be able to form a coalition government with New Democracy or PASOK. If true, then this means that Greece must go to another round of elections and that the rest of us, including those still foolsih enough to have money invested in the markets, will be left with high levels of uncertainty/volatility for a few more weeks. More importantly, though, it shows that the Greek political complex has become much too rigid and reactionary for the Eurocrats to manage.

Here are some other updates from Athens News Live Blog (will add any relevant updates at the top as they come in):

9.01pm< KKE has moved to ask for another electional battle./i>

 

8.59pm New Democracy leader Antonis Samaras has commented on his meeting with Alexis Tsipras and naturally, it isn’t positive. Samaras noted that he would back a government of national security if it meant staying in the euro. Furthermore, he added that he alone had sent a letter to Brussels asking for significant changes in the bailout policy and as that letter had been positively received, he saw no point in going back on such a request. He stressed that in negating the memorandum, Alexis Tsipras wants Greece to exit the euro and enter into bankruptcy. “This is something I cannot agree to” he said. He noted that the Greek public had voted for a political change, but also to stay in the euro. The ball is now firmly in the court of Evangelos Venizelos, but there is little hope that he will find a solution where others have not.

It is now 100% clear to everyone that the European people, and specifically the Greek people, are almost unified in their resistance to further austerity. Last year, we would occasionally hear some ill-informed pundits squack on about how most of the Greeks still like the Euro and wouldn’t really mind making “a few” sacrifices to stay in it, but now those people are forced to shut up, sit back and learn a thing or two. The message of “no more austerity for the people and welfare for the banks” has reached an unquestionable level of pitch perfection.

The fate of Greece, its political economy and its people, though, still remains as uncertain as ever. There are still many issues the Greeks must hammer out for themselves WITHOUT the interference of the Troika. While the people have clearly expressed their unwillingness to entertain any more pro-austerity policies crafted by the “moderate” coalition government of PASOK and ND, they have not made clear whether they will ultimately embrace the policies of the far left or the far right, or a combination of both.

There are both major advantages to be had and major pitfalls to be encountered with either one. What is clear, though, is that a turn too far to the right, i.e. to the Golden Dawn neo-nazi party and its policy platform, may be a turn into the most bitter parts of European history in the 20th century. It would be tragic for the Greeks to finally escape an oppressive EU regime only to fall under the dictates of an equally oppressive/dangerous reactionary regime, which would also have consequences for the rest of Europe and the world. Maria Margaronis describes Greece’s sudden “leap into the dark” in an article for the Guardian.

Greece takes a leap into the dark, driven by defiance and despair

 

The message of Sunday’s election in Greece is clear: the Greeks have said no to more of the cuts and austerity measures that have devastated the country, pushing unemployment above 20%, shattering the healthcare system, tearing families apart and leading some to suicide. It was above all a vote of rage against the two major parties, Pasok and New Democracy, which between them ran the economy into the ground, signed up to a disastrous austerity programme in exchange for dead-end bailouts from the EU and IMF, and then allowed the blows to fall on the most vulnerable.

 

The medium, though, is more confused and troubling. As elsewhere in Europe, the draining away of the centre has revealed a jagged landscape: the shorthand of “extremes of left and right” doesn’t begin to map it. The most obvious rift in Greece in the last months – a rift that’s been described to me more than once as a “civil war”– has been between those who are for and against the “memorandum”, the EU/IMF schedule of demands. The pro-memorandum forces want to keep Greece in the eurozone at any cost; most of their opponents also want to stay in Europe – but not of “Merkozy”, austerity and the banks.

 

Across that rift runs an older, deeper one, whose roots go back at least as far as to the actual civil war that followed the Axis occupation, leading to 30 years in which the left was outlawed, and culminating in the neo-fascist junta of 1967 to 1974. The social and political collapse brought by the crisis has revived those memories, too, as well as old family loyalties. In the summer of 2011, when the aganaktismenoi (“outraged”) of Syntagma Square briefly became the darlings of the foreign media, conservative truck drivers could rub shoulders with eco warriors and direct democracy mavens; the Greek flag could stand for self-determination as well as nationalism. But not any more.

 

The biggest shock of yesterday’s election was the arrival of the neo-Nazi Golden Dawn in parliament, with 21 out of 300 seats and 7% of the popular vote – the first neo-Nazi party to enter a European assembly since the second world war.

 

Its leader, Nikolaos Michaloliakos, threw Greek journalists who wouldn’t rise for him out of his press conference and dedicated his victory to “the brave boys in the black shirts”. “Those who slander us,” he barked, and “those who betray this country should be afraid: we’re coming.” Near Kalavryta in the Peloponnese, the site of one of the most terrible Nazi massacres in the 1940s, Golden Dawn graffiti calls for “a new Holocaust to clear the filth from the country”.

 

It’s not yet clear, demographically, where this horrifying surge has come from. But Golden Dawn won votes across much of the country – and not just in the inner cities, where it is encouraging the persecution of immigrants and woos old ladies with offers to escort them to the cash machine. It also got the votes of one in 10 young people. Adding Golden Dawn’s vote to those of the other two far-right parties, Laos and Panos Kammenos’ Independent Greeks, one in five Greeks voted for rabid nationalism and anti-immigrant rhetoric.

 

Three things have nurtured the rise of Golden Dawn and its less flagrant cousins. First, the humiliation and rage provoked by the austerity measures and by the crude scapegoating of Greeks abroad; second, the presence of thousands of destitute migrants desperate to go north but trapped in Greece by the EU’s cynical migration policies; third, the fact that mainstream politicians – especially but not only conservative New Democracy leader and likely new prime minister Antonis Samaras – have shamelessly pandered to their blood-and-belonging nationalism. Samaras has promised to support the church and religious education and to repeal a law giving citizenship to children of legal immigrants; one of his campaign ads featured Hagia Sophia in Istanbul, the lost cathedral of Byzantium and symbol of Greek irredentism, shorn of its Ottoman minarets.

 

The other surprise winner inlast night’s election was Alexis Tsipras’s Syriza, the Coalition of the Radical Left, which easily beat Pasok to second place, sweeping all of the greater Athens region and Thessaloniki. But predictions either of a revolution on the edge of Europe or of a miraculous rebirth of radical politics are a little premature. Syriza is not so much a party as a campaign coalition, the product of repeated efforts to bind the fissiparous Greek left into an electoral force. Its deepest historical root is in the old Eurocommunist party, but it includes a range of tendencies from Trotskyist to left nationalist, from Maoist to green.

 

Tsipras’s stroke of genius in the election campaign was to offer a political home to a broad spectrum of anti-memorandum forces: the trade unionists disillusioned with Pasok, the protesters in the squares, the occupiers of schools and government buildings, the organisers of solidarity networks and barter systems and alternative micro-economies. His popularity surged a few weeks ago when he proposed a government of the three left parties, including the Communists (who would never allow such a thing). Adept at being all things to all potential constituents, he has made few proposals for reform beyond making the rich pay tax; he speaks easily of “the people” and has implicitly compared himself to Chávez and Allende.

 

Tsipras is the man of the moment, the one who has managed to channel a diffuse but powerful hunger for rebellion and release; but beyond rejecting the memorandum, it’s not clear what he plans to do with his new power. Like all left populists, has a nationalist streak: he condemned the last government for being “not quite Greeks”, and though he has been impeccable on race and immigration, he hasn’t ruled out co-operating with the hard-right Independent Greeks on the issue of the memorandum.

 

Greece has said no to austerity; it isn’t clear what it’s said yes to yet. Much will depend on what kind of government, if any, can be formed out of the fragments and on what happens elsewhere in Europe: on whether François Hollande sticks to his promises, on next year’s election in Germany. Driven by a heady mixture of defiance and despair, the Greeks have taken a frightening, thrilling leap into the dark. We can’t know yet where it will take them, or the rest of us.

If you have the bad luck to find yourself taking a trip to a hospital in Minnesota, Michigan or Utah in the near future, be on the lookout for debt collectors from Accretive Health posing as hospital employees, accessing your private medical records and trying to get at your wallet while simulatenously discouraging you from taking on any additional medical treatment, regardless of whether you may actually need it to oh, say, save your life. Private collection companies like Accretive and their practices represent the quintessence of debts, legitimate or otherwise, endangering one’s physical health.

Following up on the Physical Risks of Debt presented a few days ago, in which we discussed the use of “debtors’ prisons” as a means of coercing payments, a related and just developing story was brought to my attention (h/t JoeP). It is the rather egregious story of “undercover” debt collectors who pose as the front-line staff of hospitals, including employees working in patient registration, scheduling and billing, with the full support of the hospitals that house them. This story was just broken by the New York Times on Tuesday, with Jessica Silver-Greenerg reporting:

Debt Collector Is Faulted for Tough Tactics in Hospitals

 

Hospital patients waiting in an emergency room or convalescing after surgery are being confronted by an unexpected visitor: a debt collector at bedside.

 

This and other aggressive tactics by one of the nation’s largest collectors of medical debts, Accretive Health, were revealed on Tuesday by the Minnesota attorney general, raising concerns that such practices have become common at hospitals across the country.

 

The tactics, like embedding debt collectors as employees in emergency rooms and demanding that patients pay before receiving treatment, were outlined in hundreds of company documents released by the attorney general. And they cast a spotlight on the increasingly desperate strategies among hospitals to recoup payments as their unpaid debts mount.

 

To patients, the debt collectors may look indistinguishable from hospital employees, may demand they pay outstanding bills and may discourage them from seeking emergency care at all, even using scripts like those in collection boiler rooms, according to the documents and employees interviewed by The New York Times.

 

In some cases, the company’s workers had access to health information while persuading patients to pay overdue bills, possibly in violation of federal privacy laws, the documents indicate.

 

The attorney general, Lori Swanson, also said that Accretive employees may have broken the law by not clearly identifying themselves as debt collectors.

 

Accretive Health has contracts not only with two hospitals cited in Minnesota but also with some of the largest hospital systems in the country, including Henry Ford Health System in Michigan and Intermountain Healthcare in Utah. Company executives declined to comment on Tuesday.

 

…

 

As hospitals struggle under a glut of unpaid bills, they are reaching out to companies like Accretive that specialize in collecting medical bills.

 

Hospitals have long hired outside collection agencies to pursue patients after they have left hospital facilities. But financial pressures are altering the collection landscape so that they are now letting collection firms in the front door, according to Don May, the policy adviser for the American Hospital Association, a trade group.

 

To achieve promised savings, hospitals turn over the management of their front-line staffing — like patient registration and scheduling — and their back-office collection activities.

 

Concerns are mounting that the cozy working relationships will undercut patient care and threaten privacy, said Anthony Wright, executive director of Health Access California, a consumer advocacy coalition. “The mission of these companies is in direct opposition to the supposed mission of these hospitals.”

 

…

 

Employees were told to stall patients entering the emergency room until they had agreed to pay a previous balance, according to the documents. Employees in the emergency room, for example, were told to ask incoming patients first for a credit card payment. If that failed, employees were told to say, “If you have your checkbook in your car I will be happy to wait for you,” internal documents show.

 

Employees at Accretive’s client hospitals ask patients to make “point of service” payments before they receive treatment. Until she went to Fairview for her son Maxx’s ear tube surgery in November, Marcia Newton, a stay-at-home mother in Corcoran, Minn., said she had never been asked to pay for care before receiving it. “They were really aggressive about getting that money upfront,” she said in an interview.

 

Ms. Newton was shocked to learn that the employees were debt collectors. “You really feel hoodwinked,” she said.

 

While hospital collections at Fairview increased, patient care suffered, the employees said. “Patients are harassed mercilessly,” a hospital employee told Ms. Swanson.

We are talking about a complex, multi-faceted issue here, and it’s not just the “evil” debt collectors who are to blame for all of our problems. It’s really a combination of an oppressive debt-based, for-profit system and an entitlement culture that has led many of these institutions and people into the thankless situation they are now in. On the other hand, many of these private institutions have benefitted tremendously from the promotion of this credit-entitlement complex over the years, and now they are intentionally subverting the system’s rules in a malicious way to save their own asses.

What’s important for our purposes, though, is to simply understand that there are real risks associated with any form of debt and that is why it’s generally a great idea to stay out of it. It is also important to understand what [few] rights you have when dealing with debt collectors. The primary source of protection is the Fair Debt Collection Practices Act (FDCPA), which was created “to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection, and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information’s accuracy“.

The FDCPA is just one means of protection from debt collectors, and will obviously be very limited in its ability to shield us from the immense power/influence of large creditor institutions and governments that bend to their will, but right now it could still provide much-needed relief for some people who are being constantly harassed for payments. So here is what the Act requires of “debt collectors” (who are defined broadly), and more information on the FDCPA can be found here on the Federal Trade Commission’s website.

Fair Debt Collection Practices Act

 

The Act requires debt collectors to do the following (among other requirements):

 

*Identify themselves and notify the consumer, in every communication, that the communication is from a debt collector, and in the initial communication that any information obtained will be used to effect collection of the debt.

 

*Give the name and address of the original creditor (company to which the debt was originally payable) upon the consumer’s written request made within 30 days of receipt of the §1692g notice;

 

*Notify the consumer of their right to dispute the debt (Section 805), in part or in full, with the debt collector. The 30-day “§1692g” notice is required to be sent by debt collectors within five days of the initial communication with the consumer, though in 2006 the definition of “initial communication” was amended to exclude “a formal pleading in a civil action” for purposes of triggering the §1692g notice,[24] complicating the matter where the debt collector is an attorney or law firm. The consumer’s receipt of this notice starts the clock running on the 30-day right to demand verification of the debt from the debt collector.

 

*Provide verification of the debt[25] If a consumer sends a written dispute or request for verification within 30 days of receiving the §1692g notice, then the debt collector must either mail the consumer the requested verification information or cease collection efforts altogether. Such asserted disputes must also be reported by the creditor to any credit bureau that reports the debt. Consumers may still dispute a debt verbally or after the thirty-day period has elapsed, but doing so waives the right to compel the debt collector to produce verification of the debt. Verification should include at a minimum the amount owed and the name and address of the original creditor.[13]

 

*File a lawsuit in a proper venue. If a debt collector chooses to file a lawsuit, it may only be in a place where the consumer lives or signed the contract[26] Note, however, that this does not prevent the debt collector from being sued in other venues for violating the Act, such as when the consumer moves outside the venue and a letter demanding payment is forwarded to the new address, even if the debt collector is unaware of such a change in residence.

One foundational piece of advice here at TAE as been to get out of debt and stay of debt – not only because the monetary costs of such debt will grow, but also because debt can be used as a means of physical repression and enslavement. It gives public (government) and private institutions the sufficient amount of leverage they need to take control of both your possessions and your body, with the latter being a much more pronounced risk during a period of credit contraction. Here are a few snippets about this issue from Our Depraved Future of Debt Slavery (Part II):

If you are allowed to voluntarily downsize your living standards and retain some freedom of movement/action, then you are not really a slave. And that’s not meant to demean the existential struggle of the chronically unemployed and/or homeless people living on the streets or in the subway, whose numbers are bound to increase and many of whom will die of sickness, cold and hunger, but it’s hard to say that they are “attached” to our economic system of complicity and coerced participation. The most obvious way this slavish attachment forms is through personal debts/obligations.

 

That’s why it’s very important to pay off your mortgage(s), car loans, student loans, outstanding balances on past bills, etc., throw away your credit cards and generally avoid taking on debt at all costs. However, that is not a panacea for avoiding debt slavery by any means. One reason is that, as mentioned in Part I, creditors and third party debt collectors may literally conjure up debts for people who never agreed to take on those debts, by failing to account for payments, illegally jacking up interest rates, retro-actively inserting penalty clauses and other similar tactics. Or, they may simply doctor up brand new “contracts” that never existed.

 

…

 

Where can any of these people turn to for relief or protection? Can they seek help from their local police departments or court systems? Traditionally, those have been potential avenues for at least a modicum of justice. Soon, however, even these institutions will be well into the process of being privatized in the name of “fiscal responsibility” and “market efficiency”, which is really code for corporate control over all facets of the modern state. Wealthy corporate conglomerates will not only have seized the “power of the purse”, but also the state’s dispute resolution mechanisms and its monopoly to use coercion and violence in pursuit of vaguely-defined goals.

A recent article in the Daily Mail begins to paint the picture of how many Americans are already well within the confines of debt slavery, with almost nowhere or no one to turn to for help. It shows us how the American legal system is like a big glop of silly putty for the powerful institutions – it can be deformed, twisted and redesigned into almost any shape they desire. First, we hear the story of Lisa Lindsay – a breast cancer patient and survivor who was jailed over a $280 medical bill which was sent to her in error, since she had already paid it off.

Breast cancer survivor handcuffed and thrown in jail over a mistaken $280 medical bill as ‘debtor’s prisons’ return to the U.S

 

A breast cancer survivor who was sent to prison over a mistaken $280 medical bill has highlighted the return of debtor’s prisons in the U.S.

 

Illinois resident Lisa Lindsay had received the medical bill in error and was told she did not have to pay up.

 

However, the bill was turned over to a collection agency and state troopers arrived at her home and took her away in handcuffs.

 

The Illinois teaching assistant eventually had to pay more than $600 to escape prison, as legal fees were added to the bill.

 

‘I paid it in full so they couldn’t do it to me again,’ said Lindsay whose plight has alerted law-makers in Illinois to the growing problem.

 

The case of Lindsay as well as others suggests that more people than ever before in the U.S are being thrown in ‘debtor’s prisons’ for not being able to pay back loans.

So, first of all, Lindsay represents all the people out there who are being saddled with debts that they don’t even owe, conjured out of thin air. How many times have you heard of someone receiving a medical bill “in error”, or bills in general? Sometimes we are talking about honest mistakes by the institution involved, but it’s easy to see how this can be done intentionally for the benefit of private creditors, as well as a state/local governments that are primarily concerned with squeezing revenue from their citizens (Lindsay had to pay $600+ to make up for the $280 she never owed).

The second important thing to not here is the technical reason for why these people are being hauled off to jail for failure to pay debts. It is NOT because failing to pay a debt is a jailable offense – in fact, the Supreme Court has ruled that it is unconstitutional for the state to imprison people for civil debts (especially those who cannot afford to pay). What is happening here is that people are being jailed on contempt of court rulings due to their failure to appear at judicial hearings and/or violation of court orders. We see how this works with the story of Jack Hinton:

Disabled roofer Jack Hinton sat in jail until he could come up with $300 on a debt he owed a lumberyard.

 

According to a hearing transcript, a central Illinois judge listened to Hinton’s story, noted he’d recently been paid after finishing a roofing job, and said: ‘Mr. Hinton, you had $1,000 in your pocket, you chose to spend it elsewhere in violation of the court order. That lands you in jail.’

 

Hinton’s wife took out a loan to buy his freedom. Her $300 went to the debt collector.

 

Debt collectors have become so aggressive claim some that poor people who are behind on payments of as little as $25 a month are being sent to jail.

 

Even though debtor’s prisons have been illegal since 1833, lenders are being accused of exploiting legal loopholes to have their borrowers found and sent to jail until they pay up.

 

Acting within the law, debtors aren’t arrested for nonpayment, rather for failing to arrive to court hearings thereby falling foul of contempt of court laws.

 

This results in a police arrest warrant being issued for ‘failure to appear’, the debtor is tracked down, packed off to jail and can only get out by paying the set bail bond which of course matches the amount owed.

Critics of legal loopholes allowing prison time to be dished out to bad borrowers say it is reminiscent of 19th century Victorian debtor’s prison like this one at St Briavels Castle in Wales

Indeed, it is extremely easy for creditors and third party debt collectors to engage in these work-arounds with the complicity and the resources of the state. The only thing these collection agencies are required to do is file a complaint in court, give the defendant “notice” (via mail) and post an attorney in the courthouse, who will sit back and wait to see if the debtor shows up. If they never receive a copy of the complaint and the summons, or they are simply unable to show up for court, then the creditor gets a default judgment and every available taxpayer-funded means at their disposal to enforce it.

If they do manage to show up, then the creditor will most likely get a judgment anyway, including court costs and interest. Technically, the burden of proof for establishing the existence and the amount of the debt is on the plaintiff, but practically it ends up being on the defendant, who will not have counsel in a civil proceeding. At this point, the new class of alleged debtors have pinned all of their hopes on state legislatures reacting quickly and swiftly to close the various loopholes and provide them with the slightest degree of protection (I wouldn’t hold my breath).

Affecting everyone who owes money from health care services to automobile loans, debt collectors are using publicly funded courts, sheriff deputies and county jails to pressure people with prison to pay back their money reports CBS News.

 

And now some state legislators are trying to plug this loophole by making court notices be served in person rather than mail, arrest warrants to expire after a year and the bail bond returned to the debtor not the lender

 

…

 

In fact in Illinois alone, legislation designed to plug loopholes aimed at debtors is waiting to pass through the state senate.

 

‘Creditors have been manipulating the court system to extract money from the unemployed, veterans, even seniors who rely solely on their benefits to get by each month,’ said Illinois Attorney General Lisa Madigan last month in a statement voicing support for the legislation.

 

‘Too many people have been thrown in jail simply because they’re too poor to pay their debts. We cannot allow these illegal abuses to continue.’

 

A 2010 report by the American Civil Liberties Union that examined five states – Georgia, Louisiana, Michigan, Ohio, and Washington — discovered that people were being imprisoned at ‘increasingly alarming rates’ through legal debts.

 

Some of the examples cited included a woman who arrested four individual times for failure to pay $251 in fines and costs related to a fourth-degree misdemeanor conviction.

 

Another example that the ACLU used was of a mentally ill juvenile imprisoned by a judge for a conviction for stealing school supplies.

 

‘The sad truth is that debtors’ prisons are flourishing today, more than two decades after the Supreme Court prohibited imprisoning those who are too poor to pay their legal debts,’ said the ACLU.

 

‘In this era of shrinking budgets, state and local governments have turned aggressively to using the threat and reality of imprisonment to squeeze revenue out of the poorest defendants who appear in their courts.’

As made clear in my series on debt slavery, the truth is that most state governments are a) complicit in the process of debt enslavement and b) unable to do much about it, anyway. These states rely heavily on the federal government for funding, especially in recent years as their public finances have collapsed, and the Feds have never been hesitant to lace those funds with strings. On top of that, the federal government can simply supersede state laws in this area by making issues related to debt forgiveness a federal concern, under the guise of interstate commerce or “national security”, and invoking the supremacy clause.

The point is that this form of debt slavery will be a very real risk for people in upcoming years, and only has the potential to get much worse before it gets any better. It is especially a risk for those with limited means and/or unserviceable debts, but the people with sizable assets and relatively few debts can fall victim as well. This is not an issue of what people rightly owe to other parties, but rather of how much labor and surplus wealth can be extracted from a formerly wealthy population by any means necessary. While we can justifiably expect that this wealth conveyor will break down in the future, along with the associated risks of debt slavery, we should also remember that it will not disappear overnight.