Yellow Cab Medallions: It's A Wonderful Life

The people of Bedford Falls save George

 Frank Capra's "It's A Wonderful Life" is a Christmas holiday classic, widely considered to be one of the greatest films of the 20th century. In the well-known plot, community credit union manager George Bailey is facing bankruptcy and ruin. He is preparing to commit suicide because his absent-minded Uncle Billy misplaced an $8000 payment (roughly $132,000 today) to the local banker, Henry Potter. We, the audience know that Potter actually found and took the money, but is not crediting it to George Bailey's Building and Loan. In the climactic scene, the entire community rallies to George Bailey's aid, bringing whatever money they can spare to save him.

People's warm memories of this film are - in part - constructed. It did not receive great reviews when it came out and it lost the studio a lot of money. Worse, the FBI issued a memo suggesting that the entire plot was a Communist trick to discredit capitalism by portraying bankers as greedy and larcenous. It wasn't until three decades later that "It's A Wonderful Life" became a popular staple of Christmas television.

I disagree with J. Edgar Hoover assessment. I think that a real communist movie wouldn't have ended with Potter getting away with theft. It wouldn't have ended with working people scraping together their meagre cash to pay him a second time. I think it would have ended with George Bailey's neighbors enacting justice on vampire capitalist Henry Potter. I am not the only person to imagine a happy ending

Stomping Potter on SNL

for "It's A Wonderful Life." In 1986, Saturday Night Live aired a sketch they called "The Lost Ending." In this imagined version, Uncle Billy remembers where he left the money and the people of Bedford Falls storm Potter's home and give him the stomping he deserves. That is People's Justice.

So what does this have to do with yellow cab medallions? Yesterday the City of New York and the yellow cab drivers announced a deal - backstopped by the City - that will reduce the debt of drivers who own medallions. The necessary background is that those medallions, which are necessary to operate a yellow cab, were being bought up by private capital firms between 2004 and 2014. That artificial demand resulted in increasing their price from $200,000 to $1 million in the same period. The kicker was convincing drivers that this was not a bubble, that the value could only increase, and that a loan (at predatory terms, of course) was their ticket to being their own employer and the American Dream. Private capital bailed quickly as so-called "ride sharing" services (Uber and Lyft) seized the market from the yellow cabs.

Shall I spell out the parallel? The banks who got into this scam were taking money at predatory rates from drivers, mostly newcomers to the country, many with limited English, when they knew they were selling medallions at prices that they themselves had artificially inflated. Over the course of the next few years drivers realized they owed many times more money than the medallions were actually worth, and that they were working 72-hour weeks and still making less money than before to pay back these loans. Many committed suicide. No angel named Clarence appeared to save those despondent drivers.

And now? Just like the people of Bedford Falls the people of New York are (in this case belatedly) arriving to save those drivers instead of holding the vampires accountable.

There are a couple of changed circumstances since 1946. One new twist is the debate about the (very partial) student loan forgiveness President Biden offered last week. We have been watching the spectacle of politicians and business people who have recently received trillions in COVID loan forgiveness bitching up a storm about people receiving $20,000 in loan forgiveness. And - again, a parallel - those original loans were meant to cover the payrolls of the businesses that were losing money, but were given to the owners instead of the employees, many of whom just pocketed the funds for themselves, saying a big fuck you to their workers.

And what do these thieves say to the student loan recipients? You should never have borrowed money you couldn't afford to return, exactly what the predatory lenders have been saying to the cab drivers whose homes they were seizing, exactly what Potter said to George Bailey.

The opponents of student loan forgiveness aren't just vampires or hypocrites, though. Their thievery borders on a religion. Because their Great Orange God filed Chapter 11 bankruptcy six times! It should be clear to everyone that the only debt they think should be honored is ours, what we owe them.