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Help Tech—Jail the Poor

By Annalee Newitz

NOW THAT that the outsourcing frenzy has inspired a small economic boom in India, tech companies looking for a source of cheap, skilled labor are turning to places like China and Estonia. But this strategy, like all that are based on exploiting labor in developing nations, is doomed to fail. When those geeks and their countries start dominating the market, U.S. companies will find themselves scrambling to come up with business plans that don't depend on ripping off Third World hackers.

Fact is, you can't just keep moving your outsourcing hot spots from nation to nation—eventually, you've got to come home. And that's why the Republicans are working now to create the domestic economy of tomorrow—one that won't require anyone to revamp business models that depend on underpaid professionals in engineering and the sciences.

Nothing brings us closer to this exciting future than last week's passage of the bankruptcy bill, a pernicious piece of legislation that destroys financial safety nets for working- and middle-class people, while allowing the rich to shield their wealth from debt collectors.

The bill eradicates what are called "clean slate" declarations of bankruptcy under Chapter 7, which allow people who've suffered tremendous financial setbacks to erase most of their debts and start over. Instead, the majority of people who file for bankruptcy now will be forced to do it under Chapter 13—that means they'll have to pay back a portion of their debt no how dire their circumstances.

Who wins in this situation? Credit card companies, of course, which have sunk millions into passing the bill. Their propagandists argue that this bill will help the poor. Because the credit industry can now rest assured that it will recoup most losses when debtors go bankrupt, Visa and MasterCard can extend credit lines to people who might previously have been perceived as too risky. In other words, we're replacing a good safety net with a bunch of big, grinning loan sharks.

Here's where things get interesting: the people who will be most affected by this bill are people whose income is above the median in their state, but who aren't fabulously wealthy. People who make over the median—low- and middle-income types—have to file for Chapter 13, while those below it can still file for Chapter 7. Meanwhile, anyone who is making huge payments on houses or cars can deduct those payments from their income. So if you own a lot of big-ticket items, under the new bankruptcy bill it's very likely you'll qualify to file for bankruptcy under Chapter 7.

My point is that this bill needles the middle class and lower-middle-class, precisely the group whose members have the job skills that recently got outsourced to China.

So what will we do with all of these destitute middle-class people wandering around living in their cars because they had to file for bankruptcy under Chapter 13? We can't just let them fall off the grid, because they'll never repay those credit card companies that wanted so badly to pass this bill in the first place.

So my idea is that tech outsourcing and credit card companies could create some pretty interesting partnerships in this not-so-distant future of debt-riddled, desperate professionals.

First, Visa could set up a series of debtors' prisons to keep those Chapter 13 zombies corralled while they work their way out of bankruptcy. And then Silicon Valley companies could make deals with Visa for cheap IT drones. Tech giants would outsource a bunch of their QA to the debtors, give Visa some kickbacks (which of course wouldn't be credited toward the workers' debts) and generously allow their captives to work at substandard wages to climb never-endingly out of bankruptcy. It's a perfect system.

And that, kids, is how we'll rescue the tech economy from foreign takeover. With the help of the credit industry, we can outsource to our own debt prisoners. It's a brave new world, and I personally can't wait to live there.

Annalee Newitz ([email protected]) is a surly media nerd who only reads the B-list blogs in her town.

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From the March 16-22, 2005 issue of Metro, Silicon Valley's Weekly Newspaper.

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