Occupy Wall Street seems to have become a movement equally well-known for what it hasn't accomplished (much of anything, going by the establishment's churlish appraisal) as for what it has. But that may be about to change.
A splinter faction of OWS calling itself Strike Debt has launched the "Rolling Jubilee," an initiative that seeks to erase the debt of thousands of Americans — and in so doing prompt a fundamental rethinking of the morality of debt.
Strike Debt targets a corner of the banking system few people are even aware exists. Banks hold huge numbers of loans on which borrowers have defaulted or fallen behind. Eventually, lenders give up on this debt and sell it for pennies on the dollar to a secondary market of buyers who bundle the debt for resale, or try to collect from the debtors.
The Rolling Jubilee aims to short-circuit that debt-brokerage machine, saving unpaid loans from the clutches of scavengers by buying up and forgiving them.
Strike Debt has already tested the legality of this workaround, paying a mere $500 for $14,000 of debt and abolishing it. Now, the group is taking the experiment nationwide with a website (rollingjubilee.org) that allows users to purchase and cancel chunks of debt, including student loans and outstanding medical bills.
That highlights the communitarian impulse harnessed by the project. It's direct action and mutual aid at its altruistic finest, operating on a crowdsourced level.
And, for a group often ridiculed as lacking substance, the Rolling Jubilee represents an evolutionary milestone: a fusion of popular resistance with technical savvy. Rather than fighting existing power structures through civil disobedience, the Occupiers have devised a clever way to bend the system to their advantage.
But let's not pop the corks just yet: consumer bailouts have been attempted before, and the results haven't been pretty. Take the case of American Homeowner Preservation, a group that set out to buy distressed mortgages to save homeowners from foreclosure. It didn't work. Once lenders caught wind of what was happening, they began requiring buyers to sign an affidavit promising they'd evict homeowners whose mortgages they'd bought.
Those lenders weren't just being nasty for the sake of it. They feared creating "moral hazard" — if homeowners think they'll be let off the hook if they default, they'll be more likely to take out mortgages they know they can't repay.
One thing's certain: once the Rolling Jubilee picks up steam, it'll draw fire from the same corporate interests that thwarted the mortgage buyout program. They'll argue that freeing irresponsible consumers of their obligations will only encourage them to rack up more debt.
But that claim isn't just silly, it's disingenuous. Leaving aside the fact that Strike Debt is beginning with medical debt (which is rarely voluntarily accrued and morally unassailable as far as needing relief), banks and credit card companies love it when people fall into debt. To that end, they've geared society to facilitate easy credit. Indeed, even as real median incomes have stagnated over the past 20 years, spending on consumer goods has soared. Where has this affluence come from? Nowhere — it's a mirage. You don't have to look any further than the 43 percent of US households that carry credit-card debt from month to month to understand Americans are spending money they don't have.