Glenn Beck has never met a conspiracy theory he didn’t like, so imagine his delight on March 22 unveiling a new “terrorist plot.” He’d come into possession of a recording of Stephen Lerner, a left-leaning union activist, explaining that an effective action against Wall Street abuses would be for citizens to stop paying mortgages and student loans and for local and state governments to halt debt repayment. Lerner argued that such a “debt strike” would generate the leverage for some real change to benefit the middle class.
Beck hates Lerner’s idea, but the two actually agree on several points: The Federal Reserve System is corrupt, Wall Street created crappy mortgages, “too big to fail” is nuts, and certain Armani-clad folks should be in jail for crashing the economy. Where they part philosophically is in the morality of not paying on contracts, with Beck lamenting (as the nation’s self-appointed surrogate mom) that “two wrongs don’t make a right.”
Well, this task may seem insurmountable, but I’ll try to reconcile the views of Beck and Lerner. A debt strike is powerful, legal and not unlike the time-honored boycott. Beck argued that to even suggest a destabilizing debt strike is an act of terrorism, but considering the minimal discussion in the media (even on other Fox News programs) of Lerner’s “outing,” there doesn’t seem much chance of the FBI breaking down his door. But I’ll don my own conspiracy cap and proffer a sinister theory about why this matter isn’t getting much corporate-owned media attention: Lerner’s idea really is a viable one. One publication that did give it some play was the National Journal, a magazine with an annual subscription rate pushing $1,200 that’s read almost exclusively by Washington insiders, lobbyists, think tankers and corporations. I’d imagine they’re following this story closely.
Being in debt is usually considered a liability, but there’s a saying: “Borrow a little money, and you have a creditor. Borrow a lot of money, and you have a partner.” Collectively, Americans borrow a lot of money, and financial institutions have a huge stake in having us, their partners, repay them.
But much of our current debt is for real estate that now has little, no or negative equity. Cars may be worth less than their outstanding loan balance. Credit cards and other unsecured debts aren’t backed by anything. Imagine the leverage Americans would have for demands that have to be met before we’d continue paying our debts. What would the financial industry do if even just 10 percent of the outstanding debt in this country went delinquent? Foreclose on all of it? They could never unload all the homes and cars.
Of course, the demands shouldn’t be some partisan wish list of favors for the few. Each point would have to garner support from a broad spectrum of citizens, and the strike would be most effective targeting a wide range of institutions that would then pressure each other for resolution. And since there might only be one chance to mobilize the nation for such a strike, the demand might look something like this:
We, the people of the United States, require before terminating this strike:
1. The modification of home mortgages to reflect outstanding balances to be more in line with current market values and with fair and fixed interest rates. Consumer credit interest rate limits pegged to reasonable percentages above the prime rate with fair considerations for credit worthiness. This would be Wall Street’s partial penance for collapsing the economy and for having received a free bailout from taxpayers.
2. The Supreme Court will nullify its 2010 Citizen’s United decision because Clarence Thomas and Antonin Scalia had conflicts of interest that should have disqualified them from hearing it. Impeach them if they refuse. This will be the first step in rolling back corporate political influence to what it was during the first 87 years of this republic and canceling the bogus “personhood” status corporations gradually acquired.
3. Congress will re-enact reasonable limits on campaign contributions, ceding political power to actual human citizens instead of powerful corporations.
4. The Senate will kill the filibuster to make itself a truly democratic body and thwart moneyed interests from controlling it with only 40 percent of the vote.
5. Congress will enact strong financial reform, effective consumer protections and regulations that close the revolving door between government “service” and corporate and lobbying jobs in related industries.
6. President Barack Obama will replace Treasury Secretary and Wall Street cuddle toy Timothy Geithner with someone on par with Elizabeth Warren, and tell corporate insiders like Jeffrey Immelt, “Thanks, but no thanks for your service.”
7. The tax code will ensure that corporations and wealthy individuals pay a fair share.
Of course, such a bold move can’t cure all the country’s ills. If strikers start quibbling, the “debt strike” won’t hang together, and the divide-and-conquer oligarchy will drive wedges into any cracks.
And Lerner might even win over Beck supporters if he’d modify one point. All withheld payments should be deposited in escrow accounts and paid when the strike is over. There’d be no theft or fraud, just a new spin on the old tactic to stop the financial industry from further exploiting America’s middle class. And when the late payments are made (with no penalties or extra interest for strikers), lenders will clear all delinquencies and complaints at credit-reporting bureaus.
Labor unions are great, but it’s time to broaden the concept. A citizens’ debt strike could help remedy several financial injustices. Americans might be ready for a new kind of revolution that doesn’t involve rioting against entrenched dictators or brandishing automatic weapons, but does slap Wall Street back into its place.