Strike Debt Portland #N3
Everyone knows that the slogan “we are the 99%” changed political discourse worldwide. With even mainstream media now filled with debt stories, it’s only a matter of time before Strike Debt, debt refusal or debt jubilee becomes a meme. The news is all about debt. In Europe, the social movements are laying the way towards a major debt refusal.
Look at what’s in the news just today. The Federal government is finally going to begin overseeing the actions of debt collection agencies. Debt assemblies are filled with stories of people receiving phone calls from these agencies in the middle of the night, about their harassment of family members and friends and the open threats made of physical and even sexual violence. In a foolish loophole, companies doing less than $10 million a year in collections (about 37% in terms of the total dollar amount) will be exempt from these rules.
Following the conviction of banks for mortgage fraud in Nevada, the Federal government is finally joining in here too. Nevada sued the Royal Bank of Scotland for hustling people into mortgages that did not require initial full payments and had a low start-up interest rate. Such options kept the casino of house prices going. However, borrowers who took these options saw a rise in both the principal and then the interest rate after a brief period. And now 60% of mortgages in the state are underwater. Nevada won $42.5 million in damages, $36 million of which will be distributed among homeowners: debt abolition by another name.
Today, too late, the Federal government filed a suit for $1 billion in damages against Bank of America for similar fraudulent mortgage practices. The hustle here was to move the bad mortgages off B of A’s books to Fannie Mae and Freddie Mac. The bank made its money on fees and percentages, while the taxpayers got stuck with the bill. Bank of America? Bad for America. Shame that this suit wasn’t filed two years ago so that the administration could have something to show people going into the elections–if Romney wins, the whole thing will disappear of course.
This kind of thing is everywhere: Illinois today announced that its whole provision of state services has been damaged by debt repayment, resulting:
in decrepit commuter trains and buses, thousands of unsound bridges, 200 hazardous dams and one of the most inequitable public school systems in America.
To sum up: everything we have been saying in Strike Debt, and that I have been writing here about debt, is not the wild delusion of extremists but the increasingly mainstream view of the debt society.
Where we part ways with The New York Times and Co. is over solutions. It’s past time to push matters towards debt refusal. In Europe, they’re planning exactly how to do that. A group of Italian organizations–Attac Italy, Centro Nuovo Modello di Sviluppo, Re: Common, Rivolta il debito, Smonta il debito–have issued a call for a New Public Finance to be debated at the Europe-wide Firenze 10+10 convergence in November.
Their key tactic is a citizen’s audit of the debt. This audit will establish what aspects of public and private debt are “odious” (debt-speak for illegitimate) and therefore to be abolished or rescheduled. Such audits are planned across Europe. The strength of the tactic is that it reverses the morality question. Rather than it being “immoral” not to repay one’s debt, it will be seen to be immoral to issue fraudulent loans of the type made by Royal Bank of Scotland and Bank of America. Further, by initiating a public debate on debt via the audit, the movement can win popular opinion before any debt refusal. That refusal would then seem logical, fair and necessary.
Here’s how they put it (their translations which I have not modified):
The creation of the debt was to the benefit of the few and not the majority of people. The non-taxation of financial income, the lack of genuinely progressive tax reform, and the corrupt use of public spending for social control, have benefited a restricted class of people, and the gap between rich and poor in our country has become more profound.
A public and participatory audit – both at national and at local authority level – is necessary for assessing which debts are illegitimate and therefore not to be recognized, and which should be rewarded instead by restructuring the debt composition through an immediate freezing of the payment of interests and a fair, democratic and transparent renegotiation with the creditors.
This proposal will be modified, expanded and developed in Florence but the outlines of the project are clear and powerful.
How would you carry out such an audit? It requires a nationwide debt refusal movement, organized in local chapters, with local autonomy but consistent with an overall set of principles. Such a movement exists in Spain. We’re building it here. It’s happening.