Debt’s Depths

This much I understand about the crisis. If somebody owes you, you can sell this debt, which, with interest, may be a nice investment. This creates a debt over this debt. You can make it your business to collect debts, cut them into sausage-like packages, and sell these debts over debts over debts, and so on: a simple recursive function, that with some artificial colorant may stimulate salivation as much as any dubious piece of meat.

Some call it, euphemistically, making money, though it is nothing but making debt. If you’re smart or cynical enough, you will in good time have passed on your package of debt towards somebody who believes that debts are as good as goods. As they are, as long as they keep rolling. If through irresponsible lending too many debtors at the bottom of the line default, one or more dominos are likely to fall over, with predictable effect.

Governments have decided that (on the whole) the financial sector is crucial to our survival. By backing them with massive guarantees, they allow financiers to go on playing domino. It is the non-profit and collective sectors of society which pay the price.

The Dutch government has quickly followed others with its solution, a solution so paradoxical that it may even seem smart: non-profit activities should become profitable. What is most baffling is how Capitalism’s apostles turn every failure of the system into a pretext for its resurrection.