STOP THE SQUEEZE NEWSLETTER
By  In Debt We Trust Director Danny Schechter

DURBAN, SOUTH AFRICA: South Africa has been one epicenter of change in the world. With the overthrow of apartheid and the emergence of its new economy, new problems have emerged. Political and racial apartheid may be gone but economic apartheid a great gap between rich and poor continues to fester with vast disparities in wealth and growing intractable poverty. Debt is emerging as a leading issue in this country as it is throughout the Africa continent.

Even as Nelson Mandela and his movement overthrew the shackles of a racist system, they found themselves as a matter of first business forced to pay off the debt of the government they replaced. The all white government had borrowed widely to try to keep the system of racial domination in place, and now its former victims and new victors had to pay off their obligations. What an irony.

Today South Africa is fully integrated into the market system with sprawling suburbs and giant malls. Consumption is a religion here like it is in the United States. May writers here  like MMatshilo Motsei writes about the need to reintegrate moral values  “in a capitalist society driven by a “What do I stand to gain?” mentality as opposed to “whats at stake for the country.” She  quotes several leaders decrying the “growing consumerist and materialist nature” of the culture. In which the ultimate outcome is “a breakdown of moral values fuelled by greed, corruption and criminal activity.”

Sound familiar? I am here to show IN DEBT WE TRUST at the Durban International Film Festival which features independent productions from 77 countries. It was an honor to have my film here since many films document problems caused BY the United States government, not IN the United States.

The first screening was packed ad held in a regular movie theater in of all places, a casino with rows of ATM machines on every wall sucking the money out of the accounts of the endless streams of suckers there to get rich. In a way, it is  a palace of debt of another kind.

I started the screening by asking the audience felt that IN DEBT WE TRUST  is relevant here?  And guess what? The audience almost to a person said it is, Afterwards people raised questions and shared their experiences. The comments came from a Zulu woman who had lived in exile in the United States, a Muslim father concerned about materialism in his kids; a white activist. Who stressed the need for education at the primary level.
I came away feeling that we now need to promote the film interenationally. (All ideas are welcome.)

I was told about a new consumer protection law and many organizations concerned about the issue that may want to show the film. What I saw was that this a global problem and is slowly becoming a global issue. The organizers of the Festival did too, writing “the debt issue is an increasing global problem as more people buy into America’s false dreams.” I wonder: is it America that is to blame or is it our globalized and  hyper charged capitalist system controlled by a small number of financial institutions?

But what to do?

OTHER FILMS ON THE ISSUE

Another film at the festival, “What Would Jesus Buy?” is about the New York based Reverend Billy and his “Church of Stop Shopping” crusading against what they call the “Shopocalypse.”

Another movie about Ghana is called “Damned by Debt Relief” examines the failed promises of Debt Relief as promoted by Live 8 and Western governments,  So called HIPC countries (Highly Indebted Poor Countries” had their debt canceled after the 2005 G8 Conference in Scotland. It was partly a response to a large march to “make poverty history” in which I took part. Two years later because of this film by Ceri Dingle, I learned that there were so many strings attached that Ghanians could not decide their own priorities and were being dictated to by financial donors. This is ian instructive lesson to those of us on the Stop The Squeeze website crusading for     debt relief in America.

We have to try to avoid the manipulation that the people of many African countries are now suffering under.  At the same time, Americans need to realize that people in other countries are experiencing economic pain too, often much worse than our own.

THE LATEST DEBT BLUES NEWS

Since I am traveling, I haven’t had a chance to follow all the financial news but this story from London’s Telegraph:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/26/
cnusecon126.xml&CMP=ILC-mostviewedbox

The United States faces a severe credit crunch as mounting losses on   risky forms of debt catch up with the banks and force them to curb 
lending and call in existing loans, according to a report by Lombard  Street Research.

Bear Stearns headquarters in New York

The group said the fast-moving crisis at two Bear Stearns hedge funds   had exposed the underlying rot in the US sub-prime mortgage market, and   the vast nexus of collateralised debt obligations known as CDOs.
“Excess liquidity in the global system will be slashed,” it said. 

“Banks’ capital is about to be decimated, which will require calling in   a swathe of loans. This is going to aggravate the US hard landing.” Charles Dumas, the group’s global strategist, said the failed auction 
of assets seized from one of the Bear Stearns funds by Merrill Lynch   had revealed the dark secret of the CDO debt market. The sale had to be   called off after buyers took just $200m of the $850m mix.

“”We don’t know what the value of this debt is because the investment   banks shut down the market in a cover-up so that nobody would know.   There is $750bn of dubious paper out there in the form of CDOs held by 
banks that have a total capitalisation of $850bn.”
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“SUBPRIME CHERNOBY”

US property writer Paul Muolo described the Bearn Stearns crisis as the   “subprime Chernobyl”, saying the bank had created a “cone of silence”.

…“There isn’t a recovery about to happen,” said Ara Hovanian, head of   the building group Hovanian Enterprise.

…Lombard Street said the Bear Stearns fiasco was the tip of the iceberg.   The greatest risk lies in the “toxic tranches” of lower grade   securities held by the banks.

MORE PAIN ON THE WAY

… The worst of the US property crisis has yet to hit since there is an   overhang of $2,000bn of mortgages with adjustable rates which have yet   to be reset. Many borrowers could see payments jump by half, or even 
double.”
                      

Imagine that, motgage payments doubling. That means more foreclosures and economic troubles. Bear in mind that IN DEBT WE TRUST is subtitled “America Before The Bubble Bursts.”

What I realize here in South Africa is that it is not just America that is being affected. The IMF has warned of a global recession.  What went up is coming down.

Brace Yourselves. But also join with us in promoting more public awareness of this problem.Help us get In Debt We Trust seen and discussed. We can’t say we weren’t warned. Now its time to act.

Share your comments and ideas for spreading the word to: dissector@mediachannel.org