Settling the Debt: Who's fighting Over What and What We Can Do About It (X.) by X.

Picture yourself sitting at a huge table of diners in a restaurant. A small group of bankers, big stockholders and corporate execs feasted on champaign and caviar all night. The rest of us got anything from half a sandwich to a couple of peas. Now here comes the check and it's a huge one. The bankers and their stock-holding buddies owe most of the bill. But they don't want to pay up. And since they know the owner, they're trying to work out a deal under which they go home while the rest of us go wash dishes in the kitchen... for the next 10 years.

As Keith points out in his bold proposal to build a debtors' union, the resolution of the current global economic crisis requires that someone take a big loss. And since no one wants to take a big loss, all the economic players in the game (classes) are doing all they can to avoid paying up. The frenzied speculation that set off the financial collapse created fictitious value for years (e.g. houses that were worth $300,000 were valued and sold at $500,000 because speculators counted on house prices to keep going up forever). Now banks, hedge funds, mutual funds, etc. are sitting on a lot of IOUs that will never be paid back (e.g. impossibly high mortgages that broke homeowners cannot repay).

The rest of big business can't get loans from the collapsing banking system to finance their upcoming projects (big business always finances future projects with borrowed money since sitting on huge sums of money is not profitable). As the crisis deepens these businesses can't get new orders for whatever they're producing (whether goods like machinery, cars, etc. or services like entertainment, health care, etc.) and start to cut down production to remain profitable, which means laying off masses of workers. The workers -the rest of us- are on average buried in personal debt that we accumulated when we borrowed from the banks (credit cards, loans) to make up for our declining real wages which the big stockholders slashed over the past decades in their desperate attempt to maintain huge profit margins (see the instructive posts by Keith and Jim for their take on Marx's explanation of the declining rate of profit).

As the economic crisis continues to deepen, the following questions become more urgent every day:

-Who will get stuck with how much of the bill?
-How much worse will the ongoing depression get before the debt question is settled?

What the traditional media pundits won't discuss is that the answers to these two questions depend on two other questions:

-Who are the economic players (classes) in the 21st century economy and how are they being impacted by the current crisis?
-Which of these economic players (classes) will successfully unite to safeguard their interests at the expense of the others?

For Revolutionary Democracy, the key is to figure out how to unite as many of the progressive economic players (classes) around a concrete plan of action to force the banking and corporate players to assume responsibility for the debt caused by the capitalist system (of which they are the greatest beneficiaries and defenders).

Keith's proposal to build a debtors' union provides us with much-needed dual power strategic direction. A united front of the working classes (from the factory to the office) and small business allies capable of launching a general debt strike could force the financial and corporate powers-that-be to renegotiate consumer debt on a mass scale (a modern Jubilee as Keith points out, which we need to evangelize among progressive Christians!). A massive consumer debt settlement in turn would jump-start the economy by returning to the workers the buying power they are due (e.g. when you get your check, you can actually spend some of it and save some of it, rather than giving a huge chunk of it to the banks for your credit card bills, mortgage, etc.)

The task at hand is to flesh out the debtors' union strategic proposal (which classes would unite most readily and why) and to develop a tactical project plan (how do we go about uniting these classes in a debtors' union). Specifically, we need to:

-Analyze the current economic situation more thoroughly with the express purpose of identifying each economic player, its relationship to the 21st century economy production process and how it is currently being impacted by the crisis. For example, what is the difference between struggling old economy capitalists (auto, steel, textiles, etc.) and new economy capitalists (internet, green energy, etc.). Which ones will come out of the current crisis stronger, which ones weaker? Also, who owes how much? What is the debt burden of the average student? blue-collar family? white-collar family? Etc.

-Develop concrete action proposals with achievable short-term goals that can help people grasp the revolutionary potential of a debtors' union. While we must broadcast the debtors' union and general debt strike idea in its full boldness, we must recognize it as a long-term goal (which could become relevant sooner than later should the economic situation deteriorate quickly). In the meantime, we could start researching and broadcasting all tactics available to people to resist the banks when facing foreclosure, rising interest rates, etc. We could also document and promote all instances of collective, organized resistance such as the recent Chicago sit-down strike, reviving the old Unemployment Committees of the 30's that prevented evictions in their neighborhoods, etc. A website fully dedicated to this task -updated frequently and radically open to mass participation- could serve as an early organizing hub that progressively demonstrates what a debtors' union could do in the real world.

Sounds like a good project for an ambitious Rev Dem study circle to take up at this point in time...