The core of my objection to Occupy Wall Street and its progeny was and is that it never had the discipline, cohesion or communications skills to make it clear what the “movement” really wanted to accomplish, other than generally blaming all the world’s ills on the wealthy and successful. This was the reason for its failure, though Occupy fans like to say that it “succeeded” by starting a national dialogue about corporate executive salaries and the growing disparity in income levels between the richest and the poorest Americans—as if that dialogue hadn’t been ongoing long before the first sign went up in Zuccotti Park.
Now there are signs that the Occupy bitter-enders are hard at work launching a real, substantive effort with a specific goal, albeit and insane one: to bring down the financial system with a “debt strike.” ( In These Times headlined its story about this “You Are Not A Loan.” Pretty clever!) The idea is to refuse to pay back the interest or principal on outstanding debt, and to insist that all loans and interest be forgiven, since the debt system is inherently corrupt and rigged to transfer wealth from the poor to the rich.
We shouldn’t have to expend a lot of argument on why this is unethical. People, companies and nations in serious debt reach that point because they spend more money than they have. They borrow money promising to repay, agreeing to pay an additional fee, interest, for the privilege of using money that doesn’t belong to them. The vast majority of debt is not amassed by desperate debtors who have to deal with the equivalent of Loan Shark Larry and risk broken legs or death unless they pay unconscionable fees. Most debt comes from wanting something before you can pay for it. While laws are in place to minimize predatory lending and to provide a safety net (in the form of bankruptcy) so people and companies don’t end up destitute and in debtor’s prison, essentially the system, like society itself, exists on trust, the cornerstone of all ethics. Lenders give their money to trustworthy loan-seekers, and charge higher interest rates to those who they deem less trustworthy. That is fair.
Occupy’s “debt strike” makes sense only in a backward-ethics parallel universe where irresponsible choices have no consequences, it is ethical to break promises and agreements, and those who make money are deemed greedy if they don’t just give it away. Reading the Debt Resistor’s Operations Manual, apparently the beginnings of a blueprint for a world-wide debt strike, is like being led on a tour of Bizarro World by a double-talk expert. Same examples:
- “We are told all [our debt] is our own fault, that we got ourselves into this and that we should feel guilty or ashamed. But think about the numbers: 76% of Americans are debtors. How is it possible that three-quarters of us could all have just somehow failed to figure out how to properly manage our money, all at the same time?” Now that’s a head-scratcher, isn’t it? In a virulent consumer society, with celebrity, wealth, material possessions and designer labels being extolled in the media and pop culture, three quarters of the nation decides that it just has to have stuff it can’t afford. Savings rates have been declining for a half-century, the idea of building an estate so one’s children can be secure is not merely unfashionable but discouraged by tax policy, and yet mirabile dictu! A majority of the public gets the idea that it makes sense to borrow rather than save! Occupy, typically, builds its version of logic on a mutation of the “everybody does it” fallacy. Not only can conduct not be unethical if everybody does it, it can’t be stupid either. Of course it can…in fact, when everyone you know is being irresponsible, taking vacations they can’t afford, wearing expensive clothes they don’t need and driving cars that cost too much, it is much easier to go with the crowd. It’s called the influence of peer groups and culture.
- “Instead of taxing the rich to generate money to build and maintain things like schools and roads, our government actually borrows money from the banks and the public pays the interest on these loans.” This is classic obfuscation. 1) Taxing the rich wouldn’t pay for all those “things”, even if the government just confiscated all of their money. That would, of course, also require the government to run all the businesses, an eventuality that Occupy somehow thinks would suspend human nature and the laws of finance. If government runs the economy, all the corrupt people who would have been in private business will end up in the government (The Willie Sutton Rule: “That’s where the money is.”) And the government still will have to borrow money. 2) The public isn’t “paying the interest on these loans,” just like it isn’t paying for the other expenses of running a government. Is the government supposed to go on a debt strike too? Why not?
- “To the financial establishment of the world, we have only one thing to say: We owe you nothing.” And to the debt strikers, should there actually be any, I say: You are liars and thieves. You took money under false pretenses and signed a legally valid and enforceable contract promising to pay back what you borrowed. Now you are saying you don’t owe anything. But you do.
The real purpose of the debt strike, other than to give dead-beat borrowers a rationalization for stiffing the people and institutions that were foolish enough to trust them, is to crash the financial system. To be even arguably responsible, this would require Occupy to have a thorough, proven, practical alternative system in mind that could take its place, and, true to its tradition, it doesn’t. Money should be free, corporations shouldn’t have rights, nobody should suffer the consequences of bad choices, and candy ought to grow on trees. You can’t build a society, which must be based on trust above all else, with broken promises, lies and theft. Nobody is going to agree to a cooperative effort with a partner whose philosophy is that whenever an obligation becomes too burdensome, the default response is “We owe you nothing.” Ironically, this is the perceived conduct by Wall Street firms that Occupy complains bitterly about. “If you can’t beat ‘em, join ‘em” is not an ethical precept.
The In These Times article interviewed several enthusiastic advocates for a debt strike. Their names are Pam Brown, Prof. Jodi Dean, Mike Konczal and Peter Rugh. It would be both ethical and prudent for every credit card company, bank, mortgage loan company and credit company to take note of their names and tell them “Not in your life!” should they seek to borrow funds long or short-term, for a castle, a car, or groceries. They have announced that they don’t believe they are obligated to keep their promises or to pay their debts, and nobody should be obligated to loan any of them a cent.
Facts: In These Times
Graphic: Occupy Houston