Wall Street and Domestic Violence

October, which is Domestic Violence Awareness Month, is coming to a close. October also contains the anniversary of the 1929 Stock Market Crash. The macro-economy is related to personal relationships—and interpersonal violence—in the same way that the condition of the oceans as a whole is a factor in the dispositions of fish in the waters. 

If that sounds too abstract and absolute, let me start again, differently. As victim’s resource advocate assisting in both legal and economic aid to victims in a mid-sized Midwestern city, I witnessed the constant interplay of poverty and domestic abuse, all against a backdrop of state and municipal resource scarcity, low wages, and the indifference of many privileged players in the legal and governmental systems entrusted to serve the public. Victims who had economic security—even minimal, relative security—had a much, much easier time with every empowerment variable: rapid rehousing, legal services,

purple-ribbon.gifMoreover, the evidence is conclusive (and I can anecdotally support) that economic insecurity makes you far more likely than your economically secure counterpart to be in a domestic violence situation in the first place. Metaanalysis of five comprehensive studies led Claire Renzetti of the University of Dayton, and Vivian Larkin of the Wisconsin Coalition against Domestic Violence (who coordinated with the group I worked for in La Crosse) concluded that  while “middle class and affluent families do experience domestic violence, studies consistently indicate that as the financial status of a family increases, the likelihood of domestic violence decreases . . . as the ratio of household income to need goes up, the likelihood of DV goes down.” In fact, DV rates are five times greater in the lowest income households than the highest income houses. And Renzetti and Larkin, too, pointed out that being poor makes it difficult to respond to the violence that being poor made one likely to experience. “As the economy has worsened,” they concluded, “many DV survivors have likely found that they cannot count on family and friends to help them in tangible ways because these individuals are experiencing greater financial distress themselves.”

State and local governments are the first lines of response to all kinds of crises, and domestic violence is no exception. We can moralize that private organizations, churches, etc., ought to be the first line of response, and those organizations—especially churches—are indeed capable of valiant and generous efforts at helping victims. But in addition to the cultural and legal limits of private aid, such aid is robust only when the economy is robust. In the language of economists, private aid is cyclical rather than counter-cyclical.

Over the past decade, Wall Street financial institutions have severely damaged state and local governments. Some large banks have manipulated markets and exchange rates resulting in the tanking of economies in cities like Baltimore. In Chicago, interest rate swaps have crippled one of the nation’s largest public school systems. In nearly every major and medium-sized city, debt servicing fees have drained accounts of money officially devoted to serving the people. Big financial players either sparked or failed to extinguish the toxic mortgage crisis. The list goes on. If poverty is associated with increased propensity for domestic violence, and the behavior of Wall Street entities is responsible for poverty, then even though it’s probably in poor taste to say that “Goldman Sachs exacerbates domestic violence,” it’s reasonable to say that the painful social consequences of Wall Street’s mismanagement of public resources exacerbates domestic violence and hinders local government from financing top-of-the-line response and relief services for victims.

And after banks and debt servicers have drained both cities and citizens of resources, payday lenders have stepped in to offer domestic violence victims 350 to 400 percent interest rates on the small loans victims often secure to get out of their house, pay their bills, pay for attorneys or medical bills, and feed their children. Again, private organizations have endeavored to make grants and loans available to victims, but there’s never enough money to go around, and those resources, too, are made or lost at the whims of Wall Street. Moreover, “banks and credit card companies typically have few procedures in place to help victims repair their credit histories.”

Legal services for victims are essential. Judges are often unsympathetic to victims, as are employers and landlords, and victims need help fighting through these systems. The Institute for Policy Integrity concludes that

Civil legal services improve the likelihood that women will be able to obtain protective orders from courts, which is a significant factor in reducing rates of domestic violence. In fact, studies have shown that the availability of civil legal aid can be effective in reducing rates of violence, and even more effective than alternative interventions such as the provision of shelters or counseling services.

In a rational and just scenario, victims would be given competent lawyers for free. But the market for legal services is wildly inefficient, and public policy dialogue about funding for such services always proceeds from the same assumptions of scarcity that plague traditional political economy: There's not enough money, the elites and their economists argue. We either need to raise taxes or cut and transfer money from other programs. 

But that scarcity conversation seems pretty disingenuous when you consider that banks and debt servicers take billions of dollars of our public money and either gamble it away or charge us for keeping it in the first place. Foundationally, it’s even less of a good argument in the face of the truth about how money and resources are generated in the first place. We know in our hearts that we can fund transitions to safety for people in crisis, and given the role of material insecurity in the creation or exacerbation of violence, we know we can build more secure communities. In working to build those communities we should not avoid acknowledging the human cost of the financial privatocracy. It’s a fair question to ask how many victims are acceptable in the maintenance of the status quo. 

In working to democratize our economy through public banks and other sustainable and just systems of finance, we really are working for a more secure and peaceful world. That really does mean a world with fewer victims, and one where victims can find material--and resulting internal--empowerment. 


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