A Debtors Union: Main Street’s Solution to the Financial Crisis
The economic crisis is in essence a debt crisis. For all the economic complexity involved in the details it basically easy to understand. There are way too many pieces of paper that supposedly entitle their holders to social wealth and there is not enough of that wealth to meet all those claims. Debt is just a promise to pay in the future what one does not have today. There are simply way too many of these promises and no way that they can all be paid.
In order for our society to get out of this crisis much of this debt has to be “forgiven.” In other words the creditors who lent the money have to accept that they are not going to be paid back and they will have to take the loss. This is no sin nor is it a crime. It is a part of the risk which lenders take and which, according to their economic theories, entitles them to profit. It also entitles them to lose. That is what “risk” means. The crisis continues because they won’t accept that they lost.
Once they take the loss the economy will start to move forward again. The crisis is continuing because the banks who loaned the money don’t want to accept the loss.
The bailouts are designed so that the banks do not have to accept the loss. Instead of the banks taking the hit, the government will borrow money to be paid back by our future tax dollars and they will give this money to the banks to make up for the losses they should have taken. That is a solution to the crisis but not the only one.
Instead of asking Washington to bailout people instead of banks, or asking the government to help Main St, instead of Wall St. we should just help ourselves, and solve this crisis by forming a union of debtors.
A debtors union is open to all who are indebted—credit cards, car loans, mortgages, student loans, medical bills etc. and once we organize ourselves we can refuse to pay and organize a mass default and force the debt to be written off, or we could decide to renegotiate the debt at a steep discount maybe twenty cents on the dollar. That will be for the union members to decide for themselves. In any event, we can take our destiny into our hands --Let’s “bailout” ourselves, lets “recapitalize” ourselves, lets get out of debt!
Wednesday, February 4, 2009
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I think this is great. I'm glad the squatters discussion produced this. From a simplistic tongue-only-slightly-in-cheek standpoint, the money I "waste" on student loan and credit card debt (and the interest is killing me) could re-allocated into likely more immediately economically "stimulating" areas for probably even more capitalists than I'm helping now...so maybe they should get on board!! I don't want to sound too flip, though - this is a great idea - the type of organization you saw in the Depression and the type we need now to command the paradigm and frame the debate...and Barack (like FDR) can ride our coattails toward more radically progressive policies...We need to create the "cultural space" if you will...
ReplyDeletelets think about this. how would we go about organizing a debtors union? would we try to build a massive organization that would span the spectrum of debt categories? this would seem to be the way forward if the methodology employed were to "lobby" or pressure the state apparatus to come to our rescue. I think there is real potential here but it would need to be on a truly massive scale and it would be difficult to do from scratch. I am open to it. The other option is obviously to organize discrete unionS. That is to say, we could organize around particular financial institutions and therefore bargain directly. For example, "we are no going to give you shit, bank x. this can be made very difficult. if you, bank x, want to get something you will have to accept ten cents on the dollar. etc..."
ReplyDeleteWhat are your thoughts on the implications, social/political, of these two distinct methods? how can they be augmented to be 1)more revolutionary adn 2) more immediately achievable?
how to begin is an important question. I think a website that started to provide people with tactics of resistance and started to coordinate resistance would be the way to begin.
ReplyDeleteFor example, alot of people are going bankrupt but that requires a lawyer and money, maybe it is better to just stop paying the debt and ignore the calls of collectors. I did that in the 90's and it worked. Anyway, we need a place to congregate on the web and to start talkimg resistance, and in that process we can do our reserach and unite all debtors.
Great idea, see this article on Adbusters for a similar proposal:
ReplyDeletehttp://www.adbusters.org/blogs/blackspot_blog/blackspot_debt_collection_agency.html
Micah,
ReplyDeletebuying people's debt and forgiving it is a great idea (people could also buy back their own heavily discounted debt). If we can get some of these activities started on a small scale it will give us a base to build on. Is there some debt we can buy and forgive, or can we find someone who can purchase their own debt if it were discounted?
Where's the ownership of your own debt, folks? No one put guns to your heads and said, "buy a plasma TV. Hell, buy two." There must be a more legitimate solution. WHat you're suggesting is childish. It's what my children do...they destroy the house with all their toys then when I come in and ask, "who made this mess," they mention some imaginary friend. Then they cry and scream when they have to clean it up. I'm tired of adults trying to find easy solutions to difficult problems. Yes, banks and big corporate America will exploit you if you ALLOW it. But you have a brain for god's sake. Use it. Why didn't you calculate the disadvantage of taking out a loan that was more than you could afford? Because everybody else was doing it? How about signing up for a mortgage with no job and no money down? Good idea? Who's to blame here...The mortgage companies raped people. Indeed. But it sure as heck isn't rape if you enjoyed it.
ReplyDeleteQuoting Tracy:
ReplyDelete"How about signing up for a mortgage with no job and no money down? Good idea? Who's to blame here...The mortgage companies raped people. Indeed. But it sure as heck isn't rape if you enjoyed it."
The blame would be on the corporations who said it was fine along with everyone else selling the fantasy of no-strings credit to people in need of material goods and ripping everyone off wholesale with arcane financial instruments. Cute rape analogy, so by your logic, raping someone is perfectly fine so long as you're convinced to go on a date with them.
Tracy are you arguing that the economic crisis is the fault of "selfish Americans", and that the solution is to make these people... pay up.
ReplyDeleteIf you are just moralizing I'm not interested, if you think that is the solution to the REAL PROBLEM that exists, then we can discuss...
Hey, if those companies didn't want to lose their money, they shouldn't have loaned it to people in the first place. Fuck em. We should all default on our loans, you included. Why not?
ReplyDeleteThe problem with Tracy's comment is that it treats a social problem as the problem of individuals.
ReplyDeleteThere are a number of reasons for this crisis but one of teh main ones is that wages of US workers have declined since the 70's and people have been forced to take on debt to maintain their living standards.
If tis were the problems of individuals the why would so many people be in the same mess?
The banks have created a giant world-wide company store.
If you never seen John Sayle's movie Matewan it is worth watching. The Coal Miners arrive in the company town and they are in debt before they even start working and the more they work the more they go into debt.
In any event, if we don't default on teh debt then the banks will just pass the debt onto the government and then the government will collect teh payments from our taxes.
If we default then the banks take the loss. That is juts since they have been taking the profits and they took "the risk."
Look, there's a whole web of problems that does not solely rest on the individual. Corporate greed and false advertising is a reality. However, I am asking people to take responsibility for their own actions here. Just because some mortgage company tells you you can borrow a huge amount of money when you don't have the resources to pay it back, doesn't mean you have to BELIEVE them. Didn't anyone hear "if it sounds too good to be true, it is"? This financial crisis in this country (in the world has come about based on a symbiotic relationship between individual and corporation. Yes, there is a huge disconnect in our salaries and wages as opposed to something like housing cost. But if we all stopped BELIEVING the lie that it was OK to take out credit and that it was OK to buy more house than our paychecks can afford, we would be taking account of our own finances, responsibly. Credit card companies WANT you to believe it's OK to borrow money. Pop culture makes it socially fashionable to borrow money. We end up becoming so seduced by consumerism that we forget to use COMMON SENSE. We forget to think for ourselves. Then, suddenly, when we're bamboozled by corporate America, we're shocked. We're dismayed. Are they playing unfair? Heck yeah. But they're doing so because we, as individuals remained blind. Because the bigger picture (of purchasing expensive stuff) was so much more important to us.
ReplyDeleteAnd to answer Keith's question: why are so many people in the same mess? Easy. Memes. A bad idea spread rampantly like a virus.
As to answer Red Erik: I would have to say that the problem is now bigger than the individual and that at this point the individual does needs help. But the individual did indeed get himself in this mess in the first place by not using common sense in borrowing money. The banks INDEED took advantage of this. But the individual allowed it for the sake of consumerism.
By the way. I own my own home and I do not use credit cards. I pay everything I need with cash. If I can't afford it. I DON"T BUY IT.
See, now that's fantasy land. "Pop culture" isn't responsible for some sort of chic for borrowing money. Dwindling wages and standards of living i.e. the desire to eat and have a room, are responsible for the credit crunch. Increasingly, it's become the case that people in the middle and lower classes have relied heavily on credit this past decade to buy groceries and basic amenities. So, unless you've found some magic way for people to subsist without food and are fine with pitched tents and shacks in your neighborhood, you can take your factually-weak platitudes of individual responsibility and shove 'em where the credit score don't shine.
ReplyDeleteAlso, most economists will tell you that the cause of the credit crisis isn't predominantly the fault of individual overconsumption; it falls primarily on the dicks in the finance industry who manufactured extraordinarily arcane credit instruments where they were able to artificially overvalue claims on actual wealth, e.g. make 1 dollar look like 4, package it along with other overinflated claims, and sell that illusion of wealth to greedy clients. Allowing cheap credit to people who need stuff was one of the ways they were able to inflate these packages.
Seriously, do some scholarship first before you start talking trash about other folk, many of which are only guilty of trying to afford basic goods. Blaming people for wanting money who don't get enough of it at work and not the con men at the bank who knowingly are scamming people at the bottom and selling a fantasy of wealth to other greedy people reeks of weak education on the matter.
And fuck Rick Santelli.
I think that Tracy is right that we need to reject consumer credit. So how do we get to the point were most consumers do not take on debt and credit is used to keep the economy developing by investing in businesses?
ReplyDeleteFirst, we organize a mass default. Here is the thing Tracy, a mass default is not a moral question. It is the only way to get out of this crisis. The banks must be made to eat their losses, and they can not be allowed to put the burden of their losses on people like you. The banks are basically looking for a way to sell their "bad assets" (loans they made to people who can't afford to pay them back) to the government.
The government is goint to tax us (now and in teh future) to collect the money to give to banks in exchange for worthless assets.
That is what is happening, "Wall st" or the class of financial capitalist are robbing the us all --whether or not you were "responsible."
So we must stick the bank with the losses they deserve. Teh deserve the loss because when they loan money to a prson taht can't pay it back they charge them a very high interest rate. The high rate is justified because of the "risk." Big risk means big profits, but it also means big losses. IT is time for us to teach them the meaning of teh word "loss."
Once we default, which will destroy the power of Wall St. over the real economy, then we can say no more consumer credit. We want higher wages, we want socialized healthcare, public transportation, public universities, affordable housing-- everything taht requires us to go into debt should be public-- all of the wealth that used to be siphoned off by the low lifes on Wall St. can now be used to provide us with collective consumption.
Tracy, I think that our disagreement is simple, we are blaming the banks you are blaming people.
But, if you go that way, the banks will put their losses on you (on all of us). Make the banks stick to their free market ideology. They made risky loans, and now the must lose.
The world will not end if these Wall St jokers lose their summer houses in the Hamptons.
Keith, I see where you're coming from and I do understand the system well enough to know how it snowballed out of control. But please someone admit fault. At least in the sense that the system is failing because of BOTH the banks and the individuals. What is more likely is not to pay back twenty cents on the dollar, but to pay back the dollar. Simplify: if you buy a pair of shoes for $20. Pay $20. The banks are charging you $50. That's wrong. But what is also wrong is a willingness on our parts to only pay back $4 for those shoes. When we start saying things like "we must stick the bank with the losses they deserve" it starts to sound irrational. It puts all the blame on one side while the other is free of blame. All I'm saying is that any problem must have a balanced solution.
ReplyDeleteTracy I understand your frustration. This crisis appears to be the result of greed and stupidity. BUt unfortunately there is no balanced solution. Wall St is trying to push all the losses onto tax payers.
ReplyDeleteThe debtors union and a mass default is the only way to stop the taxpayers from bearing the burden of the banks losses.
Unfortunately, Wall st plays for keeps, there is no balanced solution. So we must stick it to them and crush their power.
Keith-- I'm absolutely for social change, radical solutions, and revolutionary thinking. I think you're site is amazing, by the way. A lot of great thinking here. And perhaps a debtors union is the only means of attaining a balanced outcome. But I will say, in closing, that I wouldn't feel good about myself nor my possessions if I bought them on credit one day and then flat out refused to pay for them the next. One thing is for sure, this country better undergo a rapid transformation toward more liberal ideas if it's to sustain itself as a world power...Thanks for the great discussion!
ReplyDelete@Tracy: You're arguing a strawman. Credit was given to people who were mostly incapable of repaying their debts with the full knowledge of bankers approving these actions. There is no "refusal" happening. It's not like people have a stash of money and are refusing to apply some of it towards their debt. In fact, common expertise declares that any money to be received in tax credits and the stimulus will either go towards basic needs or paying down debt, which is why some economists argued that the recent stimulus package should've been much larger than it was and geared at the bottom.
ReplyDeleteAnd again, people allowed credit who shouldn't've been given credit aren't to blame for what is mass-scale fraud from the investor class in this country who are hellbent on having the public take all the losses for their greedy bungling.
That's OK, Dick, because earlier you were arguing gibberish.
ReplyDeleteLook, I'm not disagreeing that banks are to blame for "mass scale fraud." I AGREE WITH YOU. No argument there. I also agree with Keith's economic theories of profit and risk. I am simply adding that both sides (the individual AND the banks) have made grave mistakes financially both sides are RESPONSIBLE for this mess. I'm also adding that the idea of a Debtors Union, which, as Keith has defined, consists of the "refusal to pay [back debt] and organize a mass default and force the debt to be written off..." is irresponsible on behalf of all the individuals who borrowed beyond their means. Not sure why you consider that a fallacious argument. It's simply a matter of opinion on my part. I'm certainly not proposing a better solution. I don't have one. I simply don't get why no one here can't step up to the plate and agree that at least HALF of this problem is the onus of the individual, and that a FAIR and reasonable solution is not so much a "mass default" as, perhaps a re-negotiation of the interest of that debt.
You state: "credit was given to people who were mostly incapable of repaying their debt..." M
And yet you seem incapable of addressing what you characterize as my "gibberish."
ReplyDeleteI consider your position fallacious in the sense that you fail to recognize the fact that people are deliberately victimized into debt by these institutions. The issuers of credit function and profit by indebting people. Your extreme individualist, libertarian worldview advertently or inadvertently punishes people for wanting to eat decent meals, getting sick and wanting medical attention, desiring an education, and owning a piece of property at a reasonable cost.
All that increasingly has meant having to rely on credit for the majority of people in these past 20 odd years of dwindling wages, rising costs of living, and pointlessly rewarding the rich i.e. Reaganomics. Now you're declaring that half of this is the peoples' fault for wanting basic goods that are unreasonably out of reach, when most of it is the corporations paying people beans and Wall Street ensnaring people into debt just for the privilege of living.
You espouse an extreme libertarianism that blames the victim and that's what I take issue with. So long as YOUR house isn't robbed while there's a burglar in your neighbor's house, the world is fine. Your neighbor was too cheap to get ADT so the onus is on him or her if they're burglarized. So what if one of your kids starts choking on a toy they shouldnt've put in their mouth? It's their fault for not paying attention to the warning label. You can only go so far with an individualist perspective before you start looking silly and ghoulish.
All this debt was illegitimate from the get-go, and if you're such a big believer in profit and risk, the ones who took the insane risk of knowingly issuing bad credit and trying to pass it off as gold for greedy investors should be the ones eating the loss.
I dig this, we must think of a way for this to work. Can the debt be bought from us, by an entity we create, we capitalize it to cover 3 mos of the debt, then make it go bankrupt. Can we make a company with 10M people each owning a $1 share? Internet voting for all decisions?
ReplyDeleteWe need to transfer the debt to this company, then let it crush.
We can do our own "bad loans" bank.
Corporate lawyers, weigh in!!
THINK PEOPLE IT CAN BE DONE.
Approaching the question from an individualist perspective is very limiting too. Framing it as "this is equally your fault for borrowing money" glosses over the reality that 90% of this problem originates in the machinations of the finance industry. Speculating and flipping over assets thereby inflating prices, finding one group of fools who'll agree to take the mortgages on those overvalued properties, collectivizing what they know is high-risk debt, and convincing another group of wealthier fools to buy the steaming pile of nonsense.
ReplyDeleteThe opportunity to participate in this fraud by the public-at-large should NOT have been there to begin with. So again, how is there an equal burden on people taking advantage of bad opportunities that shouldn't have existed in the first place?
I don't even know where to begin, Dick. For starters, the whole "victim" mentality is so not happening for me. That's very 1980's. Second, is that your metaphor of children swallowing toys is just not a very strong one. WE ARE NOT CHILDREN. Perhaps that's the problem here. When we think of big old banks doing bad things TO us, and we imagine we have no control over what they do (i.e. dish out high risk debt) then, sure, we are all victims. We are enslaved. And yet, how is it that some of us aren't victimized by banks while others are?
ReplyDeleteFor the record, I am 40. I have existed in every tax-bracket imaginable. My father was a brilliant manipulator of the system and I saw how he used it to his advantage. I also saw how banks can fall a part when an individual takes control of his own credit and financial situation. Individuals have HUGE amounts of power that they don't even realize. We are not victims, Dick. And when we stop thinking as victims we are able to change the paradigms that have us believing we are enslaved.
You seem like a smart guy. And I appreciate an intelligent, non-hostile discussion with you. But you're idea of me being an extreme libertarian is way off. And your tale of people being punished for wanting to eat a good meal is too. I have had many good meals in my life. The best were paid in cash. And if I didn’t have the money, I ate at home. Simple mathematics.
I'm going out on a limb here and bringing in the possibility that this angst toward the debt crisis is due in part to people's own shame at having let things get so out of control. As we try to keep up with the Joneses we see consumerism as more essential than good credit and we end up getting buried in debt. Once that happens, we look for any way out and we look for others to blame. Now that more people are recognizing the ugly side to banking and credit, the banks have suddenly become the perfect scapegoat for all our financial woes. It makes us feel better, mentally and emotionally, to know all this debt we're buried under isn't our "fault." it's someone else's fault. We're just a victim.
That kind of thinking is detrimental to the self AND to the economy as a whole because once we give up our responsibility to our own debt and put others in charge, we are susceptible to becoming victims. When we put others in charge, they do not make decisions based on our best interest but theirs. And on and on...
No one snowflake ever feels responsible for the avalanche. Maybe it’s time we start.
By the way, I also recognize that "issuers of credit function and profit by indebting people." You're not telling me something I don't already know. But that type of system works ONLY if individuals by into it.
ReplyDeleteAnonymous has the right idea, we need to think about how to make the debtors union take off in a very concrete way. How can we build the union step by step one person at a time.
ReplyDeleteI think that we will definitely need an entity that can buy defaulted debt, we will definitely need some legal advice so we can explain to people what their options are as we build towards a mass default.
If anonymous or anyone else can try to do some investigation into the feasibility of that suggestion. I am lookinginto creating an entitity that can help people buy their own discounted debt. They would become members of the debtors union in the process.
We should also have someone go to the "bailout the people, not wall street" protest and distribute a debtors union flier with the web address. I will post more about it soon.
========
Tracy, when you talk about "angst towards the debt crisis" it sounds like you might be underestimating the depth of the ongoing/oncoming crisis.
This isn't "angst." The crisis is severe and it is getting worse and it will keep getting worse until there is a viable solution. By worse I mean more and more layoff, less and less business starting, more business going bankrupt, rising tuition costs etc.
Our "leaders" will not be able to come up with a solution because Wall St is too powerful -- Wall St has too much control over the federal and local governments. Only our collective power can defeat these Wall St chimps.
The debtors union should start in a guerrilla style, one default at a time--each default saps teh chimps of a little power-- until we build up enough power to have a mass default, and a complete rejection of consumer credit.
The destruction of the debt will end Wall St reign and it will also solve the current crisis allow the economy to start working again.
On the contrary, your whole "I've got mine, where's yours?" mentality is very 1980's and considering your age and the approximate era in which you came of age, is not very surprising. In addition, applying yourself as an example to everyone else bespeaks a very sheltered worldview where you're under the delusion everyone begins the race of life at the starting line, when the reality is some people are born at the finish line, others 100 yards behind the starting line, and the overwhelming majority of the world's population without legs to run the race.
ReplyDeleteAnd yes, metaphorically the overwhelming majority of people are children when compared to classes in power, in this case, manipulating the credit and property markets, finding whomever to buy into their fraud, even among themselves, and making away with their ill gains. Your common individual had NO POWER over what happened in the finance industry and again, you're arguing 10% of the actual problem since most individuals have been responsible with their debts and your focus on debt delinquency and overdependence on credit a very small percentage of the overall problem.
Again, you're apparently the center of the universe. Try buying your meals in cash on minimum wage and see how quickly you load up on grease and sugar since those are the cheapest meals you can get. Say goodbye to produce. Say hello to the soup kitchen. I seriously doubt you've been up and down the tax scale if you honestly believe starvation and malnutrition aren't an issue, especially here in the US.
In conclusion, and again even more to the contrary, your kind of thinking is detrimental to PEOPLE and the economy. The individualist mindset is what's wrong with your position; it's exactly the same sort of mindset that these market chimps used to enrich themselves at the expense of others. If somebody else is dumb or naive enough to buy into my nonsense, nerr, it's not my fault if they get ripped off. I know how to manipulate all this for my benefit, sucks to be them.
The snowflake isn't responsible for the avalanche, the snow clouds are. So quit blaming the snowflakes.
Since the major portion of this conversation seems to be about the aportionment of blame I'll start there.
ReplyDeleteTo simplify things, at least in the area of consumer credit, some people borrowed WAY more than they could afford so they could buy lots of toys, some borrowed a few hundred to meet grocery and utility bills, most people probably fall somewhere in between these two extreems.
Bottom line is that if a bank doesn't look at my income, or lends me the money in spite of it, they are taking a risk that is every bit as ill advised as the one I take when borrowing more than I know I can afford. Bottom line, the blame, at least at the level of the immediate choice of borrowing/lending, more than the borrower/lender knows can be reasonably paid back should be viewed as more or less equal. That being the case, the solution is for both parties to make deep concessions. I suggest the following:
Start by saying that all interest and fees are forgiven and only principle must be paid. If an individual has been paying some amount per month for years that equals say $1,000 on an initial borrowed amount of $750, that person is now free to consider that debt payed. Since this is probably the case in many people's situations, the banks still stand to make a little more than they lent.
Next, the principle owed will be broken into payments over an unlimited time period (not to exceed the life time of the debtor). these payments should be indexed to 1.) current income of the debtor at any given time and b.) what percentage of the debtors overall debt load does any particular debt represent.
Ideas such as this could form the concrete goals of any debtor's union. as far as debtors unions themselves are concerned, there must be some mechanism to track actual participation in the group action of the union. A member of a union in a factory, for example, pays union dues. Perhaps the debtors union can act as a kind of financial institution that would manage the collective debt of its members and aportion payments to creditors along lines such as those I have drawn above on the behalf of debtors. In this case, the debtors union would function something like a debt consolidation service but with more legal/political teeth.
Which leads me to the legality issue, the debtors union would need a kind of legal department to watch for the rights of members.
To the larger problem that seems to be lurking below the surface of this discussion, namely, why have we gotten to the point where credit has become so indispensable to our society. To argue that the answer to credet debt is simply to use no credit is to ignore the quesiton of why one would need more than they could afford. I'm not talking about plasma screen TV here, I'm talking about shoes and milk.
I submit that the answer here is in rethinking the economy. The future economic well being of people will depend on the development of sustainable local and regional economies with a minimal dependence on long distance trade and investment. This means small farms, small manufacturing and a shrinking of the "service" industry to only those services that can be shown to be indispensable. The indispensability of services is, of course, somewhat subjective. A fire department is, in an important sense, a "service" in that they do not produce a product. Fire departments are clearly more indispensable than scores of short order cooks. However, since part of the economic model I am proposing is less dependence on investment as a prime economic engine, services like restaurants would be more locally controled by people who wanted to do that kind of work and less about share holders in a large food service industry like McDonalds.
Finally we should consider that sustainability is a better economic "goal" than growth.
Peace
Frank
Frank, I feel like I missed a plocal iece of your argument. After you raise the question as to why people are compelled to buy necessities like "milk and shoes" you say that the answer lies in localizing the economy and substituting "growth" for sustainability.
ReplyDeleteI am not sure I follow how unsustainable consumer debt is the outcome of international commerce.
I was thinking it is more the result of our real wages declining since the 1970's. Which to put it in more dramatic and perhaps accurate language was the result of class war being waged against us. And Reagan duping a whole lot of white workers to go along with the destruction of their living standards by playing the race card. So that the class war initiated by Reagan looked like a war against Blacks that white workers could support without loss. (Reagan was a vicious racist who launched he campaign for the Republican nomination in 1980 from Philadelphia Mississippi as a signal of his solidarity with the killers of the 3 murdered civil rights workers Cheney Goodman,and Schwartz).
I think the cause of rampant and unsustainable consumer credit is important because it tells us how to fight and what solutions to seek.
If we miss that this crisis is the outcome of vicious and one-sided class struggle (one sided because we didn't really fight back at all, working people have been getting their butts kicked in for about 30 years, and that the class struggle is continuing now and informing the resolution of the crisis we will be confused.
That is why I am less interested in assigning blame than in identifying my interests. I am a debtor. My interest is to get out of debt. I would like to find a solution that gets me out of debt and also helps the whole country and the whole world, especially working people.
That solution is a mass default. It empowers workers and capitalist in the real economy while dis-empowering financial interests.
There is a debate to be had about sustainability, and local/regional economics but I don't see how it is the cause of this crisis.
I am wondering if any people posting here are bankers... if you aren't a banker why so worried about their riches?
The world and the economy will get along just fine if John Thaine, and Jamie Dimon and the rest of the Wall St. chimps lose their yachts and summer homes and have to come down to earth and live like the rest of us.
from Frank:
ReplyDelete"Bottom line is that if a bank doesn't look at my income, or lends me the money in spite of it, they are taking a risk that is every bit as ill advised as the one I take when borrowing more than I know I can afford. Bottom line, the blame, at least at the level of the immediate choice of borrowing/lending, more than the borrower/lender knows can be reasonably paid back should be viewed as more or less equal."
Nicely stated. I also like your proposed ideas.
@tracy+frank: And again, it does not address the fact that debt delinquency is a very small portion of the overall problem.
ReplyDeleteBesides, I think the main idea is being missed here with the individual responsibility canard. The goal of organizing a debtor's union is to destroy the power of the banks and the finance industry.
ReplyDeleteThe financial institutions are primarily responsible for this mess and created the conditions for it i.e. predatory lending, overspeculation, lobbying for less government regulation, cooking their books, cheating investors, selling empty claims on fake wealth, etc. Playing the personal responsibility/blame game on people who made bad decisions misses the whole point and the overwhelming portion of the problem. No matter how irresponsible anyone is with their credit, they shouldn't, along with everyone else, be paying debts 4 to 5x their actual value, all for the sake of equally irresponsible and greedy financiers.
No one should be paying 4-5x principle for sure, this is why I suggested that a fair compromise is to have people pay back principle with NO INTEREST over as long a period as it takes with no hastles.
ReplyDeleteAnyway, I've written a rather longish blog on what I percieve to be the underlaying causes of our financial "crisis" and to imply how to resolve it.
http://www.intuitiveengineer.blogspot.com/
Peace
FRank