slave-backed securities of the 1830s

One of the most important things in recent history was the housing crash of 2008.  A major factor in the crash was dubious investments in mortgage-backed securities.  Regular people had all kinds of mortgage-related financial problems.  In response, tax money was used to pay off investors.  I was amazed when I read this passage in The Half Has Never Been Told:  Slavery and the Making of American Capitalism.

The financial product that such banks as Baring Brothers were selling to investors in London, Hamburg, Amsterdam, Paris, Philadelphia, Boston, and New York was remarkably similar to the securitized bonds, backed by mortgages on US homes, that attracted investors from around the globe to US financial markets from the 1980s until the economic collapse of 2008. Like CAPL [Consolidated Association of Planters of Louisiana] bonds, mortgage-backed securities shifted risk away from the immediate originators of loans onto financial markets while promising to spread out and thus minimize the consequences of individual debtors’ failures. Investors who purchased latter-day mortgage-backed securities planned to share in streams of income generated by homebuyers’ mortgage payments. Likewise, the faith bonds of the 1830s generated revenue for investors from enslavers’ repayments of mortgages on enslaved people This meant that investors around the world would share in revenues made by hands in the field. Thus, in effect, even as Britain was liberating the slaves of its empire, a British bank could now sell an investor a completely commodified slave: not a particular individual who could die or run away, but a bond that was the right to a one-slave-sized slice of a pie made from the income of thousands of slaves.

It was part of the deal that taxpayers would pay for it if something went terribly wrong.  People say things like “the bankers see us as their slaves,” and it has an apparently-obscure basis in history.

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