On the other hand, the claims of the creditors are now more nebulous than ever because their claim on your income is now based entirely on electronic credit information. Much of the power of creditors is based on the perception that their claims are legitimate. But as it stands, people are supposed to go hungry so the guys in the towers can rearrange the electrons in their computers. When people understand this, much of creditor legitimacy is reduced to rubble.
If the world's debtors were to refuse to pay their bills for 90 days, the globe's financial system would collapse. So in theory, the debtors hold ALL the cards. The old saying that "if you owe the bank $100,000, you have a problem, but if you owe the bank $100,000,000, the bank has the problem" is now multiplied by dozens of times.
If for 90 days, the world's debtors stopped paying of their mortgages and credit cards, they would have all that extra money to spend in the local economy. The resulting prosperity would prove, beyond any doubt, that the rules governing debt and credit could be rewritten to ensure a better outcome.
Some others have thought pretty hard about the massive debts and need for restructuring. This one is especially good.
Occupy Wall Street 2.0: The Debt Resistors’ Operations ManualThe anniversary of Occupy Wall Street is September 17. While there will be public events in New York, it’s likely that number of people that will be involved will not be large enough to impress the punditocracy (multi-citi militarized crackdowns have a way of discouraging participation), leading them to declare OWS a flash in the pan.
That conclusion may be premature.
The release of the The Debt Resistors’ Manual suggests something very different: that the movement is still alive, if much less visible, and is developing new avenues for having impact. This guide is designed not only to give individuals advice for how to be more effective in dealing with lenders but also sets forth some larger-scale ideas. This is a project of a new OWS group, Strike Debt. Fighting for debt renegotiation and restructuring, something that the bank-boosting legacy parties have refused to do, is becoming a new focus for OWS efforts.
Quite a few well qualified people who in Occupy fashion are going unnamed, participated in developing this manual. Having read most of the chapters in full and skimmed the rest, I find that this guide achieves the difficult feat of giving people in various types of debt an overview of their situation, including political issues, and practical suggestions in clear, layperson-friendly language. For instance, the chapter on credit ratings gives step-by-step directions as to how to find and challenge errors in your credit records, and what sort of timetable and process is realistic for getting results. The chapter on dealing with debt collectors is similarly specific and detailed. The discussion of the bankruptcy process includes this section:
One detailed law study found that bankruptcy laws, specifically Chapter 13, implicitly favor a certain profile, an “ideal debtor,” who is usually white and married. Most bankruptcy laws tend to favor wealth over income, ownership over renting, formal dependents over informal dependents and heterosexual married couples, all of which have significantly higher rates in white communities. Before 2005, African Americans filed for Chapter 13 nearly 50% of the time, compared to less than 25% by whites. Why, you may ask? Here’s one explanation: a study found that when all other factors are equalized (identical financial cases), lawyers are twice as likely to steer Black clients toward Chapter 13 than they are white clients. The study could find no other cause besides racism in all forms: conscious, unconscious, structural and institutional.
The manual also includes two chapters on “fringe finance”, meaning financial services for the barely banked or underbanked, including check cashing outlets, prepaid cards, payday lenders, and pawn shops. It stresses that these are tantamount to a poverty tax, since low income people pay more for these services.
Each chapter has a list of resources at the end, including websites, articles and books, as well as footnotes. Some end with ideas for collective action, others with survival strategies. And it presents a manifesto:
We gave the banks the power to create money because they promised to use it to help us live healthier and more prosperous lives—not to turn us into frightened peons. They broke that promise. We are under no moral obligation to keep our promises to liars and thieves. In fact, we are morally obligated to find a way to stop this system rather than continuing to perpetuate it.
This collective act of resistance may be the only way of salvaging democracy because the campaign to plunge the world into debt is a calculated attack on the very possibility of democracy. It is an assault on our homes, our families, our communities and on the planet’s fragile ecosystems—all of which are being destroyed by endless production to pay back creditors who have done nothing to earn the wealth they demand we make for them.
To the financial establishment of the world, we have only one thing to say: We owe you nothing. To our friends, our families, our communities, to humanity and to the natural world that makes our lives possible, we owe you everything. Every dollar we take from a fraudulent subprime mortgage speculator, every dollar we withhold from the collection agency is a tiny piece of our own lives and freedom that we can give back to our communities, to those we love and we respect. These are acts of debt resistance, which come in many other forms as well: fighting for free education and healthcare, defending a foreclosed home, demanding higher wages and providing mutual aid.
You can download the manual here or from the link below. Strike Debt will also be handing out hard copies of the manual in Washington Square Park on Saturday from 10:30 AM till 7:30 PM and at Judson Church from 7:30 PM till 9:30 PM. more
Chains of DebtMon, 09/24/2012
I originally wrote the following essay in late 2009, almost three years ago. I never got it published, though I did circulate it privately. At the time I theorized that debt was the common element of oppression in American life across ages, ethnic groups, geography, etc.. Debtors were the largest oppressed group in the US if only they would recognize it. Therefore teaching people to recognize that fact would be a way of organizing people against the current system.
One thing I was wrong about, was when I said that street protests were no longer relevant. Happily, Occupy proved that wrong.
I was very happy to see, recently, that the Occupy Debt/Strike Debt project has put out a guide to debt resistance. In that spirit, I present my original piece from 2009, edited to reflect active hyperlinks.
Chains of Debt
Americans should stop paying their debts as a form of civil disobedience. Those who have already defaulted should be proud that they are resisting a system that is impoverishing America. This is because our system has become so dysfunctional and corrupt that it is no longer responsive to the best interests of Americans. Instead, our political and economic elites have built a system where a very few enrich themselves on the backs of the very many. Our "leadership" persists in adopting policies that destroy our standard of living and impoverish Americans.The American business elite has proven impervious to the usual tools of rhetorical suasion and evidence-based policy analysis.
The business elite, represented by Wall Street, use our debt service payments to implement policies that are destroying the social fabric of America. As the recent G20 summit shows, street protests are easily ignored and marginalized. Americans must refuse to financially support those who are destroying the social fabric of our nation. We must refuse to pay our debts.
The recent turmoil of the financial crisis has exposed the weaknesses at the heart of the American system. Those weaknesses are;
All of the above weaknesses have led Americans of all races and genders to carry unmanageable amounts of debt . And what was the response of our financial and political elite? The response was to orchestrate a massive bail out the so-called FIRE sector -- finance, insurance and real estate. The bailout handed trillions of dollars to the FIRE sector with no oversight. All that the American people received in return were some vague promises that the bailout money would improve the economy.
- The destruction of middle class jobs and stagnant real wages in the face of meteoric productivity increases
- The real estate bubble and the the resulting mortgage debt explosion.
- The education bubble and the resulting student loan debt explosion
- Runaway health insurance costs that lead to 44,000 deaths a year
Perhaps the money did improve the economy. It undoubtedly improved the economy for the consumers of private jets. However, it did nothing to change the ongoing strangulation of the American people by the chains of debt.
The first link in the chain of strangulation is the disappearance of well-paying jobs in manufacturing. Those jobs disappeared because of policy decisions made at the highest levels of our government and business elite. As of September 2009, unemployment in the United States is at 17 percent. [link] However, even before the economic crisis, there has been a slow shift from a manufacturing economy to a service economy. in 1950, manufacturing jobs made up roughly 34% of the US non-farm jobs, while service jobs were roughly 59%. By 2002, manufacturing jobs were only 13% of the non-farm jobs, and service jobs were 82%. Manufacturing jobs provided the basis for a prosperous middle-class in the United States.
20 years ago when it became obvious that manufacturing jobs were disappearing, many people claimed that the service economy was going to be a good replacement for manufacturing. In 1987 the New York Times published an opinion piece by Ronald K. Shelp where he argued that workers take lower-paying service jobs because they lack the training for higher paid jobs, and not because low paying occupations are dominant in a service economy. [link]
Today we see that his assertion was incorrect-- the jobs created in the service economy have been in areas that pay poorly. Manufacturing jobs have dropped to about 13 million, or around 10% of the non-farmjob market. [Bureau of labor statistics] Today there are more jobs in retail. Around 15 million Americans working in retail, and as anyone who has worked in retail knows, the vast number of those jobs pay poorly. In Shelp's article he makes fun of critics of the service economy by writing that the service economy certainly isn't a "hamburger flipping hell." He was right-- it's not, it's actually the hell of working as an underpaid Wal-mart associate on food stamps. [insert link to wal-mart/food stamp story] insert stuff from BLS about low paying job expansion in service/food.
To be fair, other areas experienced growth as well, among them the FIRE sector and professional and technical services. The FIRE sector staffed out as the real estate market boomed, and this also directly contributed to the growth of jobs in construction. If you travel to any of the newer exurbs in California, you will see that during the 1990s and 2000s the construction industry grew rapidly as well. FIRE and construction together amount to around 15 million jobs, roughly the size of the retail sector.Unfortunately, now that the real estate bubble has popped, FIRE and the construction sector have been hit the hardest. Everyone knows someone in construction who has seen work dry up completely. If you drive around any community in the US you will see partially-completed buildings with fences around them-- and that means that the construction workers are no longer on the job. more