(broken into paragraphs for reading accessibility by me)
Picture by Flickr user Tax Credits
Maybe it’s like not looking at your credit card bill, but trans movements tend to spend very little time on economic issues. There was a crisis of the 1980’s (that has been all but resolved) of white feminism dominating women’s liberation discourse with discussions of issues with very little relation to the fact that even more common than issues of gendered physical and sexual violence on a global scale is the problem of economic violence, which often places women into the very situations that cause physical and sexual violence.
Womanist and 3rd World Feminists stepped in and have made profound achievements at shifting discourse more towards these economic issues. I feel we are at that point of contention within the trans movement, where the more privileged wish for trans employment protections that will disproportionately benefit them, especially with the recent Hobby Lobby SCOTUS decision creating possibilities for sanctioned discrimination by some of the country’s largest employers of those in poverty, such as Wal-Mart. And now there are even groups and trans people as callous and hegemonic as to invest millions into trans assimilation to the military-industrial complex.
Some activists have criticized these investments by saying they could be used to solve the problems of the trans community. Admittedly if that 1.35 million dollars had been distributed to the ~4 million trans people in the US, it would be a very small average contribution. And even in the case of hundreds of millions of dollars, wherein a contribution would be significant, it would not alleviate the debilitating debts faced by many trans people in the US because of how debt is built into all monetary policy and practice. The system designates oppressed communities, such as trans people, as holders of debt: therefore we must make revolutionary changes to this system if we ever hope to live in a world free of trans poverty.
When I say system, I speak of the fractional reserve banking system of the United States. Perhaps because of the domination of conspiracy theorists like Zeitgeist and libertarians like Ron Paul on the subject, the US Left generally spends little time looking at ways to dismantle this incredibly oppressive institution. Socialists in other countries, on the other hand, are very much concerned about the practices of the US fractional reserve banking system. This infographic comes from the Socialist Party of Great Britain:
This is the crudest form of fractional reserve banking, often called credit creationism because it literally generates 9 times as much credit (money) seemingly from thin air as the original loan by the Federal Reserve. Now certain economists have derived an empirical explanation for where this large credit actually does come from in more complicated fractional reserve banking systems, but the principle remains the same: the credit created is largely than the initial loan made. Combined with the interest charged by the Federal Reserve and other banks, this creates a system in which there is always debt held by both the US government and some fractional amount of the population, regardless of the actual presence of resources.
What does this have to do with trans people? Trans people are particularly hurt by this system because of our vulnerability to two sources of debt intrinsically tied to this monetary system: credit card debt from employment poverty and healthcare costs.
Credit Card Debt from Employment Poverty
What does credit card debt from employment poverty have to do with fractional reserve banking? So it should be ubiquitously known at this point that trans people, especially trans people of color, trans indigenous people, trans disabled people, etc., face enormous amounts of unemployment, under-employment, employment discrimination, and poverty wages. As has become common practice in the US, many of the eligible people in these situations apply for (or in some cases already have from pre-transition) credit cards to retain access to survival capital.
Most credit card companies use variable rate pricing that ties movements in their interest rates to a specified index such as the prime rate. The prime rate is the lowest interest rate for commercial purposes, and it is affected greatly by the practices of the fractional reserve banking system. The Fed will deny their direct influence, but even they will admit that many banks simply mirror their decisions.
Average credit card interest rates have decreased from 1974 - 2011 by 4.11%. This may seem beneficial until we look at the change of dollar value during this same time period, the marker of how useful a person’s capital is to paying off an accrued debt. And that change is a decrease of 456%, utterly swamping the relatively small decrease in credit card interest rates. And the less money one has, the more significantly currency depreciation hurts them as seen vividly time and time again through capitalism’s cyclical economic depressions and recessions. In other words, trans people’s disproportionate poverty makes them one of the most acutely affected communities by fractional banking reserve’s continuous distortion of money markets for the purpose of massively increasing debt.
While for the uninsured or insured but not trans-inclusive trans people, the effects of fractional reserve banking is nearly identical to the above credit card debt (which it often is) dynamic. But even for trans people insured with trans inclusive healthcare, and even with the changes of the ACA, there are factors vulnerable to the practices of the Federal Reserve.
The International Insurance Society in particular notes “the long term nature of insurance contracts, pricing, reserving and investment policy are very sensitive to inflation trends and experience.” Particularly in pricing, it is the claims and insurance policies most tightly regulated and bureaucratically laborious by the insurance companies (such as trans healthcare) that sees the largest fluctuations based on inflation. One of the means by which insurance companies prevent these costs from being placed onto them is the practice of creating new policy limits, which subsequently affect the monetary amount of trans healthcare covered by insurance.
While access to healthcare, particularly through programs like Medicaid, is definitely an important struggle for trans people, it is important to note these other problems around healthcare debt caused by private insurers passing on the cost of inflation to the insured.
So What Do We Do?
The only feasible way by which trans people can liberate themselves from a guaranteed system of debt perpetuated on them by fractional reserve banking is through the nationalization of all of the US banking system, including the Federal Reserve, and worker ownership of the banks.
It should be noted that I am not proposing the far-right bank nationalization whereby select banks are nationalized for the purposes of preserving “competition”: it is not enough to dismantle monopolies held by banks like the Federal Reserve. As long as banking is based on a for-profit, hegemonic hierarchy, it does not matter whether there is one Federal Reserve or five in “competition” because all of those five will pursue the same policies which maximize elite profits (not necesarrily of the bank overall, but rather their executives) at the expense of trans people.
Cooperatives have long been a means by which oppressed communities, from Black folks in the early 20th century to some of today’s trans leaders, have created revolutionary changes in certain industries. The enormous amount of power held by private banks, especially the Federal Reserve, can make them seem like an industry beyond the influence as such relatively low holders of hegemonic power as the trans community. But all they are is an industry, an industry not exempt from caving to the pressures or losing battles to people power.