Category Archives: strike debt

Five Theses on Debt

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From Tidal for S17 by Strike Debt:

STRIKE DEBT/DEBT STRIKE/DEBT
WHEN WE STRIKE DEBT. WHY WE DEBT STRIKE. HOW TO MAKE DEBT:

We must remake our failed economic system that impoverishes millions while destroying the ecosystem. Using a diversity of tactics that includes a Rolling Jubilee, a People’s Bailout, and vigorous organizing towards a debt strike, Strike Debt seeks to abolish debt and reconstruct a just society where our debts and bonds are to one another and not the 1%.

When you strike debt, know that:

1. You are not a loan.


Debt is not personal, it is political. The debt system molds us as isolated, scared and subjugated, unwilling to consider going public for fear of the all-powerful credit ratings. There is a reason so many people speak of debt as slavery. Slavery was social death. So is debt. It makes us ashamed. We have to sell our time, our souls, working jobs we don’t care about simply so we can pay interest to the bank. Now that debt is so rampant, many of us are ashamed for putting others in debt. Our professions from teacher to lawyer and physician have become means to direct more victims to the loan sharks. So perhaps above all, we strike the fear, refuse the shame, end the isolation. When we strike debt, we are giving ourselves permission to be more than a set of numbers. In a sense, we create the possibility of an imagination. We are not abdicating our responsibility, we are exercising our innate right to refuse the unjust.

2. We live in a debt society, buttressed and secured by the debt-prison system.


$1 trillion of student debt. 64% of all bankruptcies caused by medical debt. 5 million homes foreclosed already, another 5 million in default or foreclosure. Credit card debt is $800 billion, generating an average 16.24% interest on money banks borrow at 3.25%. Permanent indebtedness is the pre-eminent characteristic of modern American life. Keeping all this in check is the peculiarly U.S.- specific apparatus, in which mass incarceration, racialized segregation and debt servitude are mutually reinforcing. The choice is stark: debt or jail. With 2 million in prison, seven million involved in the “correctional” system in various ways and sub-prime loans and other predatory credit schemes targeted at people of color, this is a system designed to disenfranchise and exclude.

3. There’s A Debt Strike Going On


There is something happening in our debt society right now. 27% of student loans are in default. 10% of credit card debt has been written off as irrecoverable. Foreclosures and mortgage default are rampant. People are walking away from debt. These actions take place driven by necessity, by desperation but also by something else. What do we call this? We could call it refusal. We could also call it a debt strike. In this time of high unemployment, battered trade unions, and job insecurity, we may not be able to signal our discontent by not going to work, but we can refuse to pay. Alongside the labor movement, a debtors movement. For those who can’t strike, we propose a Rolling Jubilee in which we buy debt in default, widely resold online for pennies on the dollar: and then abolish it. It will be funded by the People’s Bailout, and other forms of mutual aid that will prefigure alternatives to the debt society.

4. When we strike debt, we live a life rather than repay a loan.

We refuse to mortgage our lives. We reject the math that debt forces on us; math that says we cannot “afford” to care for our communities because we must “pay back” the banks forever, above and beyond what was borrowed. We question the dominance of the market in every aspect of social and cultural life. We abolish the trajectory of a life that begins with the assumption of debt before birth, and ends with a post-mortem settlement of accounts. This is financial terrorism. We intend to reconstruct a social world in which we see each other as people, recognize our differences, and acknowledge that the chimera of permanent economic growth cannot outstrip actual ecological resources.

5. We claim the necessity of debt abolition and reconstruction.


Abolishing debt is held to be an impossible demand. “Debt must be repaid!” Unless you are a corporation, bank, financial services company, or sovereign nation. We understand that debt is at the heart of financial capitalism and that the system is rigged to benefit those at the top. The question is not whether debt will be abolished but what debt will be abolished. The banks, the nation-states and the multinationals have seen their debts “restructured,” meaning paid off by the people, who now have to keep paying more. The debts of the people in whose name these actions were undertaken should also be abolished. Then we can begin reconstruction, transforming the circumstances that create the destructive spiral of permanent personal debt. Right now we must borrow to secure basic goods that should be provided for all: housing, education, health care, and security in old age. Meanwhile, around the world, debt is used to justify the cutting of these very services. We understand that government debt is nothing like personal debt. The problem is not that our cities and countries are broke but that public wealth is being hoarded. We need a new social contract that puts of public wealth to equitable use and enshrines the right to live based around mutual aid, not structured around lifelong personal debt.

 

 

Back to Organizing

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After a couple of long-distance weeks, I headed into New York for the Strike Debt organizing meeting today. I had the slightly surreal experience of reading David Graeber’s excellent anthropological study Direct Action on the way in and then meeting the author himself in a meeting that was in part about direct action. It’s interesting to compare the two moments in autonomous politics.

Today we gathered to discuss Strike Debt  and what it might do over the course of the first year anniversary on September 17 and thereafter. For a project that only came into existence in a horizontal discussion in Washington Square Park less than two months ago, it’s impressive to see the range of activities people are planning.

While there’s plenty of other activity being organized for S17 and after, it’s interesting to see a range of action around a thematic project. There are a set of publications being worked on: the Five Theses of Strike Debt that will summarize the movement; a Debtor’s Manual providing practical advice for people burdened by debt; and a longer Declaration that will provide a fully-fledged analysis of the debt crisis. All are being crowd-written. All will be available via a website that is being constructed.

One of the most intriguing projects is the Rolling Jubilee, a project in which OWS will buy up debt that is in default, easily available for pennies on the dollar, and then abolish it. It turns out that the only complicated part of all this is notifying credit agencies and indeed the debtors themselves that the debt has been annulled. Which tells you a good deal in itself.

There’s a project to create a “Telethon” to raise funds for the Jubilee at a venue in New York, which will be live-streamed and include presentations and performances.

A group is creating guerilla videos for the Invisible Army, those who are already in default whether by choice or necessity. These will publicize the extent of debt default that I think of as a wildcat debt strike.

A direct action group is proposing public defiance of debt, whether by burning bills in echo of the draft card burnings of the 1960s, or by shredding.

All of these were decided to fall under three main organizing headings:

  • Structural Change: broken down into Abolition and Reconstruction
  • Mobilization and Community
  • Changing Rhetoric

So all of this made me consider how the organizing we’re doing compares to that of the global justice movement. There’s a great deal of overlap of course, from people to process. All the mechanics of facilitation, consensus and hand-gestures are the legacy of the global justice people–although as Graeber points out, they in turn owed much to groups like the Quakers. So autonomous politics has a long history.

Perhaps the differences are more to be seen in the political culture. There’s much discussion in Direct Action about disputes with the International Socialist Organization. It’s possible that they continue–and I have seen more than a few sectarian disputes on and off line. In Strike Debt, we hear plenty of Marxist rhetoric, of course, but there’s no enthusiasm for a vanguard party or the like.

Another contrast would be that despite the permanent awareness of police infiltration, it was possible for activists to get right up to the security wall at the Quebec summit in 2001 without being challenged by police. The saturation policing that Occupy has had to learn to take for granted had not quite come into being, despite the experience of Seattle.

Finally, the obvious lesson is that, despite the enthusiasm of last September, local uprisings are not going to change capitalism overnight. At the moment, it’s doing more to damage itself than any activist ever could. Less than a year old, Occupy has learned from the past and is now learning from its own past. This is the long game we’re playing here.

And to judge by the way that David takes notes in meetings, which was, I now learn, how he wrote the last book, you should have the opportunity to find out what he thinks has been learned before too long.

 

There’s A Debt Strike Going On

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There’s a wildcat strike against debt going on. The numbers are remarkable. By definition, a wildcat strike can’t be organized and, in this case, can’t really say speak its own name. That’s why OWS has a Strike Debt campaign: to articulate the crisis, to end people’s shame at being in debt and to encourage them–us–to speak out. Send us your story to strikedebtresearch[at]gmail. No contact details will be released.

Numbers

27 percent of student loans are in default and that number is rising.

$1.2 trillion of mortgage debt is underwater (debt exceeds value of property) or about one-third of all properties.

5 million homes have been foreclosed and 5 million more are under threat of foreclosure, meaning that owners are in default or behind on payments. 300,000 people had a foreclosure notification added to their credit report in the first quarter of this year.  27% of mortgages are seriously delinquent–ironically, a slight improvement. 300,000 more people went bankrupt.

The average credit card debt per household has fallen from $17, 936 in 2009 to $14,336 now: because of mass default. In 2010, credit card companies had to write off fully 10% of all debt.

Numbers Don’t Tell the Whole Story

So although we see delinquent debt totals falling, it’s not just because people are striving to pay it back but because it has been written off or put into foreclosure. Adding all this up, the Federal Reserve Bank of New York estimates:

As of March 31, 9.3% of outstanding debt was in some stage of delinquency, compared to 9.8% on December 31, 2011. About $1.06 trillion of consumer debt is currently delinquent, with $796 billion seriously delinquent (at least 90 days late or “severely derogatory”).

Student debt is more indicative in this regard. Using their own calculation on student debt, which has it at $904 billion, the Fed indicate how serious the student debt issue has become relative to other debt:

Since the peak in household debt in 2008Q3, student loan debt has increased by $293 billion, while other forms of debt fell a combined $1.53 trillion.

That decline in other debt includes write-offs, bankruptcies and foreclosures, options that are not available for student loans. In this sense, student debt provides the clearest picture of what’s happening, precisely because it cannot be manipulated off the books like other debt.

Lenders know this and have cut back credit. Mortgage originations for the first quarter of 2012 were down 17.4% from even 2011, let alone 2007. Try and get a credit card with an interest rate under 15% once the “grace” period expires. The average credit card rate is now 16.94%. This is usury in a time when bank interest rates are at all-time lows, on average 3.25%. That’s a 500% mark-up, even before you get to fees, memberships and so on.

The Morality Question

All this data is public knowledge. What we need to make public is that people are clearly making the choice to refuse repayment of debts. While the PR machine of the debt industry has long asserted that debt refusal is immoral, the ongoing debtors revolt proposes that it is compulsory endebtedness that it is immoral.

What I mean to suggest is this: lenders are actively deceitful. Playing by the rules as presented to us as consumers leads to massive shortfalls. Students were told to contract debt as a means of getting high-paying jobs that are not available, homeowners were encouraged to borrow and refinance as much as they could because house prices never went down. These are people trying to play by the rules, only to discover that the game is fixed.

For corporate persons, as the Supreme Court has it, this kind of utter imbalance has been rectified by debt forgiveness, restructuring and other finagling. Miss a payment on a credit card or a student loan and you get hit with a penalty fee, increased interest rates and a shot credit rating. MF Global used $1.6 billion of its clients’ money to try and save their firm–and they “could face a negligence charge.” Morality has nothing to do with debt.

What we have seen with debt, as with other areas of social life, is a secularization of Catholic doctrine. In this way, confession became secularized as therapy, for example. St Thomas Aquinas, the fearsome medieval theologian, argued that there is a debt of punishment for sin that cannot be expunged:

sin incurs a debt of punishment through disturbing an order. But the effect remains so long as the cause remains. Wherefore so long as the disturbance of the order remains the debt of punishment must needs remain also.

Of course there was a way out: you could purchase an “indulgence” allowing the debt of punishment to be bought out. In the secularized form, being in debt is seen as punishment for the failure of the debtor to be sufficiently wealthy. As capital now is the highest form of value, sinning against debt is the worst sin of all.

The Credit Rating Scam

Many people are afraid to speak out about debt because they fear it will impact their credit rating. These ratings are scams. As we’ve already seen, lenders are pre-emptively withdrawing credit and increasing rates and fees. If you don’t have a loan and it’s not student debt you’re after, the credit rating score required to get the “best” deals has become so high that no-one who really needs a loan is likely to qualify. So the loan you will get will already have punitive levels of interest.

How Can You Join In?

You don’t have to refuse to pay your own debt to join the debt strike. Here are some ideas:

Speak out. Debt is immoral, not debt refusal. Challenge people who say “they borrowed it, too bad, they should pay it back.” If you’re in higher education, talk to your colleagues about debt, emphasize the risks involved and think of alternatives.

Research. In your area, what’s happening? Do you have a story to tell? Email strikedebtresearch [at] gmail

Take action. Create debtors assemblies where you live. Look for the online materials coming from the Strike Debt campaign to help you. Create a Tumblr or other off-the-shelf websites. One idea that has floated is to collectively buy and forgive loans in default. There are websites where you can buy defaulted loans for a small percentage of the face value. The commercial loan market operation hopes to recover more than that percentage and so make a profit. It’s real bottom-feeder stuff. So even if we can’t actually afford it, let’s expose this kind of scam.

Remember: Debt Is Fucked Up and Bullshit. You Are Not A Loan.

 

Space, Observation and Strike Debt

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In the past weeks since the Debt Assemblies began and led to the formation of the Strike Debt campaign, my relationship to this writing project and to OWS has begun to shift. For a long time, I wrote from the participant observer position. I was there, in the room, often in the square or on the march. But I was not taking decisions or influencing people very much, although I might make the odd comment here and there. Honestly, Occupy and direct democracy were quite a steep learning curve for an academic.

It’s also a somewhat comfortable position, of course, allowing the writer to perhaps imply criticism, although I have always tried to do the harder thing of trying to look for the optimistic or hopeful outcome. Over the past few months since I’ve begun working more closely with Occupy Theory and now Strike Debt, that safety barrier is gone. I find myself questioning whether I have the right to report certain discussions or issues, Or better put, whether I should, not from the point of view of this writing but from the point of view of the movement.

It’s not that I’m party to any secret decisions or that I’m in any way, shape or form a “leader” because there really are no leaders. It’s that I’m not sure exactly what my role is now. Some other writers I know call this “observant participation.” Key here is the acknowledgement that you are writing about the movement as you are also active in it. Unlike most of these people, I’m writing about things as they happen, more or less, rather than for a dissertation, article or book project. It’s not a moral question, although I do respect security culture within the movement and I don’t name people who have not made their writing public. It’s a writerly question: what’s my perspective on this now?

Two other developments impinge on this repositioning. One is that there are fewer people active on a day-to-day basis in OWS now than there were at May Day. A good deal of this is the summer diaspora from New York, and with the climate-changed 97 degrees it was today, no wonder. There are students back home or doing research travel and activists. Others have dropped out, burned out or moved on. So it’s easier to get a sense of the movement than it was when it seemed to be limitless. Perhaps that’s also a coming-to-terms with the sheer difficulty of actually changing this deeply entrenched system.

Finally, it’s the debt campaign itself, which is a re-orienting of my own position. We are all “in” debt, or I certainly am. Mortgage, credit cards, refinanced mortgage. It’s a place of some shame and embarrassment: isn’t a middle-aged, more or less successful person (in their field) supposed to be past all that? Maybe, but I’m not, given a commuting work situation that requires two households in one of the world’s most expensive regions. I assumed getting “out” of debt was a combination of personal discipline and professional success, a Houdini-like escape trick that has eluded me so far.

Now I can see that getting “out” of debt requires getting into public space. It means striking debt so that if a corporation is a person and must be bailed out, guess what, I’m a person as well. It’s realizing that if there are 5 million households still under threat of foreclosure, 27% of student debtors behind or in default, and $800 billion of revolving credit card debt, there’s a massive debt strike already taking place. We just haven’t dared to admit it. You are not a loan.