Why Occupy's Plan To Cancel Consumer Debts Is Brilliant

[xchrom]

http://www.businessinsider.com/why-occupys-plan-to-cancel-consumer-debts-is-brilliant-2012-11

?maxX=400

A new initiative is re-energising the Occupy movement. Called the Rolling Jubilee, it is a plan to use money from donations to buy distressed consumer debt from lenders at a marked down price, just as debt collection agencies normally would. But instead of hounding debtors for payments, it will simply cancel the debts. The hope is that the liberated debtors will themselves contribute to the fund, "rolling" the jubilee forward.

The Rolling Jubilee is a genius move for several reasons. First, debt relief is a transpartisan message that eludes conventional political categorisation. As such, it returns Occupy to its origins as an advocate for the wellbeing of ordinary people, neither leftwing nor rightwing. The Rolling Jubilee says, non-threateningly, "We just want to help people in this unfair system."

But despite its non-threatening appearance, the Rolling Jubilee has significant transformative potential. Two pillars uphold the present debt regime: the moral legitimacy of debt in society's eyes, ie, the idea that a person "should" pay back what he owes; and the coercive mechanisms that enforce repayment, such as harassment, seizure of assets, garnishment of wages, denial of employment or housing, and even imprisonment. The Rolling Jubilee erodes both. It destigmatises debt by saying, "we're all in this together, we believe your situation is unfair, not shameful, so we're going to help you out". And it lessens the severity of the consequences of default. If defaulting means you might get bailed out, why keep paying?


Read more: http://www.businessinsider.com/why-occupys-plan-to-cancel-consumer-debts-is-brilliant-2012-11#ixzz2C11iFgvY

[Live and Learn]

1. I love it. I hope it brings some much needed attention

to both the debt collection practices and the ridiculous power the credit rating agencies have amassed in addition to giving some sorely needed relief to those in need.

[SickOfTheOnePct]

3. It will certainly help the people whose debts are forgiven

But they'll still take a credit hit that will stay with them for years, albeit diminishing in importance as time passes.

[djean111]

6. And perhaps we will stop being ruled by credit ratings.

The Rolling Jubilee just may set some other things in motion.
I do expect to see a lawsuit filed by the Chamber of Commerce (or something like that) on behalf of debt collectors.

[SickOfTheOnePct]

8. I guess we'll disagree on that point

While credit ratings may indeed be overused in some cases, they do serve a valid purpose. If someone takes out a loan and doesn't pay it back, it should be harder for them to get another one.

[Live and Learn]

12. May be overused? I think that is quite an understatement.

Credit ratings are now used to get jobs, set insurance rates and gawd only knows what else. I have yet to check mine and not find some nefarious item on it that doesn't take a chitload of work to get removed. The system needs serious reforms and regulation!

[SickOfTheOnePct]

14. There are certain jobs where a credit rating should be considered

Not all by a long shot, but certainly some. Same with insurance rates, in some cases.

[Live and Learn]

16. I fail to see the logic with insurance rates at all.

And extremely few jobs should require a good credit rating. In fact, I really can't think of a good reason for any job to require it. The most immoral and corrupt people I know of have excellent credit ratings.

[wickerwoman]

65. Credit ratings can be unfairly prejudicial

and don't really tell employers what they think they do.

You can have a poor credit rating if you've never taken out a loan or used credit cards. How would that make you a bad employee?

You can also have a poor credit rating because of identity theft, computer error, a family member's serious illness, not having parents who could afford college... none of those things translate into poor future work performance.

And people who are irresponisible with money in their 20s often learn from the experience and become much more fiscally responsible in their 30s. Credit cards prey on college kids because they know they spend impulsively and usually have parents who can bail them out.

Why punish 30 year olds for mistakes they made six or seven years ago? And making it harder for them to find a job is a serious punishment that impacts their ability to ever get themselves out of the hole they've dug.

I can't think of any job where a credit rating would be more appropriate than checking job references.

[liberal N proud]

2. Hope it works

Fear the establishment will squash it.

[closeupready]

27. Of course they will squash it.

But K&R anyway.

[litlbilly]

54. the good thing people are missing here

the more debt OWS buys, the less that vulture collection agencies will be able to buy.
That has to be a good thing. This will have a nice down trickle effect and hurt those companies that rely on peoples suffering.

[99Forever]

4. Kinda blows a gaping hole in....

... that bullshit "OWS isn't morphing" meme from the establishment clowns, doesn't it?

[xchrom]

5. ...

[Live and Learn]

7. Never understood the disdain some here have for Occupy.

This is another great idea OWS has come up with. Mic check!

[99Forever]

9. Their "disdain"...

... is rooted in their fear of losing the stranglehold of the two party system has on We the People. OWS's steadfast refusal to made just another tool of the Democratic power brokers means it must be crushed before it can affect REAL change.

[randome]

15. It's mostly been the OWS adherents who claim that nothing has changed.

Occupy has always been concerned with helping the poor!
Occupy has always had this in mind!

They have morphed, that's plain to see. But they don't seem to have much to do with Wall Street these days.

And 'occupy'? They're really not occupying much, unless someone wants to claim they are 'occupying' debt.

I think a name change is in order.

[Live and Learn]

17. You don't see this as having much to do with Wall Street?

I do.

[randome]

20. Because it concerns money? I guess they do have that in common.

But everything in the world has a connection to money in some fashion or another.

[Live and Learn]

21. No. because credit ratings have become vital to

almost everything we do these days making us dependent on the bankers and wall street.

[randome]

22. I hear you but what they're doing to buy debts apparently doesn't change the bad credit ratings.

I think there should be more leeway in how credit ratings are compiled, especially in bad economic times which we are still in.

But what OWS is doing with debts doesn't affect that.

[Live and Learn]

23. It is a start to the conversation.

I am not sure why everyone expects OWS to solve all of the problems. What they are doing is starting the conversations. And they should be commended for that.

[randome]

24. I can get behind that.

[99Forever]

26. Thank you Captain Obvious.

As to the "name change"?

I'm sure everyone will jump right on that, just for you.

[randome]

28. And this is why OWS gets so little traction.

Any suggestions are met with angry scorn.

If no one is in charge of OWS, then anyone can make suggestions. I just did. Sorry if that mild suggestion rattled you.

[Live and Learn]

33. OWS is made up of all kinds. As is DU. nt

[randome]

36. Very true. I should keep that in mind more often.

[99Forever]

37. Yeah... sure...

That's IT!

[Hissyspit]

44. They're not occupying much?

That's because they were, as a non-violent movement, violently ejected from their occupations.

[tama]

48. This rolling jubilee

is just one part of the debt "conversation" of occupy movement. Currently probably most doable practical initiative, but just a part of the very wide and deep process.

[Le Taz Hot]

19. Of which we have many

right here on DU. Quite vehement about it iirc.

[blackspade]

46. No doubt.

[marmar]

10. Ked and Red......

I'm disappointed by the Smear Occupy team. They've been asleep at the wheel for the last few days.

[xchrom]

11. ...

[WorseBeforeBetter]

34. At least one was on duty, attempting to smear "OWSies".

"OWSies"... isn't that just as clever as can be? It's from the same Brain Trust that brought us "Hamster Jane PUMA Face," if I'm not mistaken...

[aikoaiko]

13. Because I didn't think OWS would last longer that the first weekend...

...I won't underestimate their ability to go further than my pessimistic expectations.

[Coyotl]

18. Is it Occupy's plan? Or is it someone's plan? Who is it? Who is Occupy?

People do things, not words. Who is doing this?

[Live and Learn]

25. Oh bother. It's not the DNC, it's not the GOP, it's not the SEIU, it's people.

Groups are made of people. Thank you for pointing that out.

[Coyotl]

56. The URL you send money to is registered to one person only.

[Live and Learn]

58. Agree you have to be careful about who you are sending money to.

Sorry if I took it wrong but your post seemed like a blanket condemnation of OWS. I am sure OWS will be clarifying many of the concerns in the near future.

[starroute]

29. These ideas come out of David Graeber's "Debt: The First 5,000 Years"

Last edited Mon Nov 12, 2012, 03:18 PM - Edit history (1)

Graeber was one of the original organizers of Occupy Wall Street. He's an anarchist-anthropologist whose ideas about society are informed by a profound knowledge of systems that aren't based on the financialization of everything. And his book, though long, is a fun read.

The ideas expressed in the final paragraph of the OP come straight out of Graeber. He points out repeatedly that debt has been confused with morality, that the cancellation of debts has been falsely painted as an existential threat to the social order, and that debt is the chief mechanism by which land and resources have been stolen from the people who depend on them and funneled into the hands of a wealthy elite.

Right now, mortgage debt, student loan debt, and credit card debt are killing us. This is absolutely where Occupy needs to be focusing, and I'm glad to see it.

[randome]

30. If there are no repercussions for debt, then no one will honor it.

I don't see that taking out a loan and then refusing to repay it qualifies someone for leniency. I'm not saying that's what OWS is doing in this case but debt, in a population as large and diverse as ours, needs to be managed.

[xchrom]

32. huh? what's happening now?

the elite created a system where people -- instead of getting good, regular pay rises -- got credit, loans, etc.

it was never sustainable -- and it wasn't a big secret.

so then -- why design something that was bound to implode, designed to benefit so few at the expense of the many?

the people aren't deadbeats -- they played a system they were destined to lose.
and the winners were destined to win.

[randome]

35. 'Debt' has been a part of Western civilization for hundreds if not thousands of years.

I doubt the 'elite' were thinking that far ahead.

Debt also allows us to buy homes and cars and start businesses. That benefits the people wanting those things.

The System needs reform but to say that 'the people' aren't deadbeats is to ignore that there are, in fact, some people who are deadbeats.

If OWS is trying to help those who are NOT deadbeats, more power to them. But I'm not sure how they can verify such things.

[Live and Learn]

38. Exactly. Going in to debt was actively encouraged by the financiers, businesses and the msm.

Taking out seconds on houses to buy another one and flip it was the latest trend to imaginary riches. Instead of pension plans gambling in the market was the way to a blissful early retirement. Zero interest mortgages and reverse mortgages were pushed as the savvy way to save now and worry about the future later.

It was disgusting and so many people fell for it and were badly damaged when the 1% decided to reel it all in for themselves.

[Hissyspit]

45. "refusing to pay for it"

Yes, that's the only reason people don't repay loans.

[randome]

55. Of course it isn't. I'm suggesting that OWS doesn't know who are deserving and who are deadbeats.

Not all debt is the result of this crappy economy. Some people try to welch out on their obligations.

[vanlassie]

60. How do you know this? How hard is it to evaluate?

[randome]

62. I don't know.

What kind of information is provided on a debt sold at auction? Anyone?

[tama]

51. Social capital and financial capital

(Serving) debt is first and foremost honoring social capital of networks of friendships, if you don't pay your debts to your friends your reputation and social capital aka "honor" will suffer. Capitalism has turned this natural instinct of social beings like us from people to people issue to debt slavery to abstract "legal persons", banks etc. who control the money creation. There is big difference lending a tool or book from your neighbor and returning it vs. being forced to take student loans, house loans, medical bill loans, consumer loans etc. to keep the financial interest based growth economy growing and staying in debt slavery to banks etc. for all your life.

What is important is for people to realize that there is no honor lost by refusing debt slavery to abstract legal persons who are oppressing and robbing you.

[Live and Learn]

39. Thanks for the information. Going to have to look that book up. nt

[Live and Learn]

40. Sounds very interesting and is available on Kindle.

I prefer paper copies and am going to see if I can find it at the bookstore today. Thanks again.

[blackspade]

49. Well said.

Graeber is a great writer.

[WaitWut]

31. Kudos!

I'm currently being chased by debt collectors about an identity theft situation. The debt has changed hands at least three times. It seems like no matter who I talk to about the situation, I just get bundled, packaged and sold to the next bidder.

Rather than just wipe off the debt they should give people the opportunity to square up as well. I wouldn't have any trouble paying off these collectors.

Good Job OWS!

[Live and Learn]

41. So many people have been hit by identity theft scams and the

ridiculously frustrating process of trying to clear it up that I am surprised there hasn't been more of an uproar over the process. Why should anyone feel it necessary to square up with debts they don't own to begin with?

[4th law of robotics]

42. I thought the stimulus might have worked better

by including a plan to buy up personal debt and allow individuals to pay it back slowly, based on income, and without interest.

Creditors don't get cheated. Debts are still paid. Just the crippling interest is removed.

And if done properly it wouldn't cost much in the long run since we'd get most of the money back.

[caraher]

43. To all those concerned about credit ratings...

Ask anyone hounded by a debt collector if having that harassment end doesn't improve life 100%. Sure, this is no cure-all but just because it doesn't wipe the slate clean in every way is a pretty weak criticism.

I don't think it can ever get very big because if enough money went into buying bad debt to really make a huge dent in the problem, the cost of that debt would automatically increase. (Buy participating in a market for it, Rolling Jubilee will make the debt itself command ever-increasing prices, reducing the leverage the scheme relies upon.) But the real point is to put the debt issue front and center.

If it did grow to the point that it truly affected the debt market, that in itself would be a huge victory, and would not happen without triggering a lot of debate about what's really happening...

[Howler]

47. I donated to OWS when they first started protesting ....

But I lost the link . Does ANYONE know how I could donate to the legitimate OWS now????
This is something I can really believe in and continue to support. OWS Forever!!!!!!!

[DaveJ]

50. Nice work. Fear should not be a part of life.

Since GWB U.S. has been engulfed in fear over every little thing. Credit not the least of those things.

I would be miraculous if one day fear were just something we experienced occasionally.

[MsUnderstood]

52. this works because the debt is worthless

Here is how debt selling works
1) orignal debt company calculates the risk vs reward of trying to collect from a person. Its a very superficial process and they give debt to a collection agency.
2) Collection agency works harder to collect money by running better searches for people, negotiating steeper discounts, etc. The debt they cant collect goes into a "trash pile"
3) the "trash pile" is sold to another agency who refines it even more. They run more data mining (checking person's income, job status, other debt, etc) and the filter for the possible payments to not worth the money.
4) the not worth it is sold for pennies on the dollar and some hard core/ borderline illegal debt collection practices come in. Heck these practices might even come in at step 3 in the trash pile.

The point is that those who forgot they had a last phone bill when the moved, missed a payment on a credit card, or overlooked something or other but have income will pay. Because the threat of bad credit and not getting the next car, next credit card, next vacation time share is real.

Those who sincerely don't have the money are the victims of a much wider problem--the will not be able to pay, their debt will be sold and resold to worse and worse collection agencies, and they will be hounded and abused by those credit agencies.

That is the debt OWS will buy-not because they have some amazing filtering system but because the SYSTEM has already filter for the probability that these debts will take more "work" to collect and will be less likely to pay.

OWS is stopping the scum of the debt collection world from their continued harassment of those already down from debt, loss, hunger, etc. They are not buying debt from the worker earning $250k and deciding he is too good to bay on his lexus.

So those of you who think this is going to ruin the credit industry, nope (that has already been done by these bottom feeders). THose of you who think "these deadbeats should have paid" well yes 4 years ago. But these debts are 4-5 years old and the original loaner is no longer in the picture or getting any money for it. They already took their corporate loss and obtained a tax break but the debtor is being harassed (most times illegally) for something years old that the person cannot pay.

its an amazing thing once you get out of the mindset that the collection agencies are the "good guys" because once you get past the first level (and sometimes even at the first level) collections is a sick twisted game of say what you can to get the money.

[DaveJ]

61. Furthermore, Collectors seem to expect the entire payoff, not payments.

In my experience, if a person has a rough stint of 6-12 months, and a bill is sent to collections, debt collectors expect the ENTIRE payoff amount. They will not allow the person to go back to making payments again.

For someone who might owe $800 or whatever and is already just making it by day-to-day, this is an impossible expectation.

[CaptJasHook]

53. I donated $100

and will monitor the genesis of the idea. If it starts to pay off by Jan/Feb, I might donate more. It may only make a small difference in a few people's lives, but if people pay it forward, it could cause more significant change.

[savannah43]

57. Here's an idea: Excepting houses, pay cash. If you cannot afford something, go without it.

Too simple? Try it before you condemn it. If you owe someone something, they have power over you. Don't give your power away, especially to buy, from a corporation, junk that was made in China.

[Live and Learn]

59. I prefer to live this way. However, it will hurt you in many ways.

Your credit rating will be hurt and you will not qualify for many jobs because of it. You will also find it harder to rent an apartment, house or car and will pay higher insurance premiums.

So instead of just parroting the "personal responsibility" meme, why not open a real discussion about debt collection and credit rating reform and regulation?

[BlueMan Votes]

63. could the 'Rolling Jubilee' be considered a charity for tax purposes?

meaning that donations could be deductions.
win-win.

[DaveJ]

64. I didn't know people were so stupid that they needed to be told that.

The truth of the matter is, people go into debt over things like 1) cars that they need to get to work. They need unexpected repairs, and if it is a rough commute, an only cheap car will not always be good enough. 2) phones force people into contracts. If an unexpected event happens people cannot get out of these contracts. 3) rent in the city is not cheap. People share spaces, and then sometimes roomates move out leaving the other to foot the bill. 4) Job loss, 5) medical expenses....

I can't believe I need to lay this out.

[jtuck004]

66. It's like a Christmas Gift for the collection agencies. It will qualify thousands of our neighbors

for a new round of high-interest credit card "Your Approved" applications...for good or bad, it would take Republican Math to figure out any other outcome.

What's in YOUR wallet?

I'm not knocking the feel-good effort, and it will save some from distressing phone calls, maybe even keep them from having future money attacked.

But one would have to be near delusional to not know that the people who profit the most from this are financial companies, collection agencies who will profit from uncollectable debt, and even companies who will create new debt because of this. Those funds will be used to perpetuate this very system, to purchase people for their servitude wherein they harass the most vulnerable and call it a job.

None of the laws that are on the books to prevent this are addressed, there is not a big effort to make people aware of their own laws that were removed to make this debt and collection behavior possible. There is a mathematical certainty that the person whose debt was paid off will acquire new debt (ask any of the credit companies - it is a certainty) which will very likely result in the same outcome.

Might be better off just handing $20 to several people on the corner. At least then you know you aren't funding a collection effort.

[Hell Hath No Fury]

67. Rolling Jubilee is focusing on --

medical and education related debt -- two kinds of debt that most people get into to save or better themselves, not rapacious consumer spending.

[jtuck004]

68. They are focusing on UNCOLLECTABLE DEBT. That is sitting in a box at a collection agency marked

uncollectable, while they pay employees to harass people into paying some or all of it. It is irrelevant where it came from, because the end result will help the collection agency, in real dollars. The phone calls will stop, mostly, on that piece of paper, along with future criminal charges that might result from court appearances, etc, now a part of the debt-collectors bag of tricks...

So when the agencies collect from OWS they can then use the money to pay people to harass others.

I think your point is that because it is medical and education that it ends there, but the credit card companies will tell you differently. That will generate business for them.

But the usury laws that used to prevent this are still gone, no discussion about that, and the lax enforcement of consumer protection laws is still with us, and people will still have their lives ruined, and some will die tragic early deaths, before someone can feel good about paying some stinking debt off at pennies on the dollar.

I guess my standards are too high.


.

[DaveJ]

69. That's not really true, imo

(the part about helping agencies, I mean)

The Rolling Jubilee, if it were commonplace, would result in less employment in collections. The faster debt collection companies get their money, the fewer people they need to employ. So yeah the big wig in charge is a winner. And yeah, they should not be profiting on people's misfortune; but overall, everyone in that field is bad, so the fewer there are the better. The next step is for debt collection agencies to be run by nonprofits.

[jtuck004]

71. That would be true if time stopped when they started. But student loan default is rising to unseen l

levels, and millions of Americans have had their mid-wage jobs replaced by lower-wage jobs. At the same time the government is paying trillions of dollars to millionaires while working-class folks get screwed over by the business those billionaires run (for example QE3 pays people like Sheldon Adelson $40+ billion a month to support their investments in mortgage-backed assets at $2 billion a pop, while over 700,000 people will be taken from their homes among the 1.2 million foreclosures we will see in 2012) , offering up an unending stream of debt, including that which will eventually be deemed noncollectable.

If we don't work on the problems that created and continue to contribute to this those companies will do nothing but profit. Elizabeth Warren has been trying to point out how the structural changes have re-shaped this environment for years, and although she gets good press, I don't see many people understanding that she has documented some of the ways people are structurally prevented from opportunity by the wealthy, and the people they purchase.

Read "Broke, USA: From Pawnshops to Poverty, Inc. - How the Working Poor Became Big Business" if you can find it. We made the world which created the growth of debt and debt collections, we changed laws that used to protect people against this, and we used to have enough jobs and an economy where getting sick wasn't an economic death sentence.

This debt is big business, and I can't hardly conceive of the naivete it would take to think that buying up some noncollectable debt is going to help anyone but the debt collectors.

But ignoring that sure keeps people from having to do the hard work of really changing things, eh?. Instead they can sit around and congratulate themselves on having done such a noble deed, and tell each other that I am a dunderhead

I'll work on other stuff, though, and give money directly to people, and the occasional org that I think is doing useful work when they need it and I can afford it.

[Blue_Tires]

70. ttt