Debt

From Occupy To Climate Justice

September 8, 2014 Wen Stephenson, www.thenation.com Strategize! Climate Change, Debt, Environment, Finance and the Economy

It’s an odd thing, really. in certain precincts of the left, especially across a broad spectrum of what could be called the economic left, our (by which I mean humanity’s) accelerating trajectory toward the climate cliff is little more popular as a topic than it is on the right. In fact, possibly less so. (Plenty of right-wingers love to talk about climate change, if only to deny its grim and urgent scientific reality. On the left, to say nothing of the center, denial takes different forms.) Sometimes, though, the prospect of climate catastrophe shows up unexpectedly, awkwardly, as a kind of non sequitur—or the return of the repressed. I was reminded of this not long ago when I came to a showstopping passage deep in the final chapter of anarchist anthropologist David Graeber’s The Democracy Project: A History, a Crisis, a Movement, his interpretive account of the Occupy Wall Street uprising, in which he played a role not only as a core OWS organizer but as a kind of house intellectual (his magnum opus, Debt: The First 5,000 Years, happened to come out in the summer of 2011). Midway through a brief discourse on the nature of labor, he pauses to reflect, as though it has just occurred to him: “At the moment, probably the most pressing need is simply to slow down the engines of productivity.” Why? Because “if you consider the overall state of the world,” there are “two insoluble problems” we seem to face: “On the one hand, we have witnessed an endless series of global debt crises…to the point where the overall burden of debt…is obviously unsustainable. On the other we have an ecological crisis, a galloping process of climate change that is threatening to throw the entire planet into drought, floods, chaos, starvation, and war.”

Obama To Reward Loan Company Accused Of Cheating Troops

September 1, 2014 Shahien Nasiripour , www.huffingtonpost.com Educate! Debt, Loans, Obama, Troops

The Obama administration plans to reward Navient Corp, the student loan specialist formerly owned by Sallie Mae, with new business some three months after federal prosecutors accused the company of intentionally cheating troops on their federal student loans, according to three sources familiar with the administration's plans. The move is likely to stoke comparisons to recent multi-billion-dollar settlements reached between big banks and federal authorities over financial crisis-era misdeeds. Banks agreed to pay sizable sums, but public interest groups have criticized the settlements because the banks suffered few business consequences and their executives escaped criminal and civil charges. "It's very disappointing," said Jason Collette, national organizer for Alliance For A Just Society, a network of state-based advocacy groups. "Until a company loses its federal contracts or a senior executive is punished, these fines are just the cost of doing business." In May, Navient and its former parent, Sallie Mae, agreed to pay a combined $139 million to resolve Department of Justice allegations that the two companies had swindled up to 60,000 service members out of tens of millions of dollars and forced other borrowers to pay unfair fees on their student loans. At a news conference announcing the settlement, Education Secretary Arne Duncan said he had instructed his staff to immediately conduct a review to determine "what appropriate actions, if any," should be taken against Navient in response to the allegations.

In Corporations, It’s Owner Take All

August 31, 2014 Harold Meyerson, www.washingtonpost.com Educate! Debt, Finance and the Economy

With companies lavishing virtually all their net income on shareholders and executives, the way many of them cover their actual business expenses — their R&D, their expansion — is by taking on debt through the sale of corporate bonds. A number of companies, however — most prominently, IBM — borrow specifically to increase their payout to shareholders. And IBM is not alone. Friday’s Wall Street Journal reported that U.S. companies are currently incurring record levels of debt, much of which, the Journal noted, “is being used to refinance existing debt, being sent back to shareholders as dividend payments and share buybacks, or banked in the corporate treasury as executives consider how to potentially deploy funds as the economy expands.” Many of the companies that have spent the most on buybacks, Lazonick demonstrates, have also received taxpayer money to fund research they could otherwise afford to perform themselves.

Argentina Sues US For Violation Of Sovereignty

August 9, 2014 Jubilee USA, www.jubileeusa.org Resist! Argentina, Debt, International Law, Vulture Funds

Argentina filed suit against the United States at the International Court of Justice (ICJ). The lawsuit argues that the US 2nd Circuit Court decision between Argentina and predatory hold-out funds violates Argentina's sovereignty. The court is a United Nations body and can only hear the case if the United States government agrees to accept the ICJ's jurisdiction. Eric LeCompte, Executive Director of the religious anti-poverty coalition, Jubilee USA Network, releases the following statement: "This case illustrates that we need basic rules of responsible lending and borrowing in place in order to stop predators. "If we had an international bankruptcy process, countries from Argentina to Grenada never would default and predatory actors are forced to sit at the table."

Clintonians Join Vulture Flock Over Argentina

July 28, 2014 Conn Hallinan, www.truthdig.com Educate! Argentina, Debt, Hillary Clinton, Wall Street

It is no surprise that right-wing Republican and hedge fund billionaire Paul Singer should be trying to wring hundreds of millions of dollars out of Argentina for a debt that Buenos Aires doesn’t really owe him. He screwed tens of millions of dollars out of poverty-stricken Peru and the Republic of Congo using the same financial sleight of hand. What may surprise people, however, is that key leaders in the administration of former President Bill Clinton are helping him do it. Singer, who owns Elliot Management, a $17 billion hedge fund, is the leading “vulture investor”—a financial speculator who buys up the bonds of debt strapped nations for pennies on the dollar and then demands payment in full. When Argentina defaulted on its foreign debt in 2001, Singer moved in and bought up $48 million in bonds. He is now demanding that those bonds be paid at full-face value—$1.5 billion—plus interest and fees. It is a move that could derail Argentina’s long climb back into solvency, as well as undermine debt settlements worldwide. A recent decision by federal District Judge Thomas Griesa in Manhattan may not only force Argentina to pay the vultures, it could unravel a 2006 debt deal between Buenos Aires and other creditors. Under the highly controversial principle of “pari passu” (“equal ranking among creditors”), if the vultures are compensated, so must all the other creditors, even those who settled back in 2006. That bill could reach $15 billion. Given that Argentina has only about $28 billion in foreign reserves, the tab could send Buenos Aires into a recession or force the country into bankruptcy.

Testimony By Kristen A. Hamel, Detroit Resident And Homeowner

July 18, 2014 Cancel Detroit's Debt To The Banks, www.detroitdebtmoratorium.org Educate! Banks, Debt, Detroit, Water

In recent weeks, Detroiters have been experiencing the inhuman austerity agenda of Gov. Rick Snyder and Emergency Dictator Kevyn Orr. Thousands of families have had their water cut off, and tens of thousands more face imminent shutoffs if a mere $150 is owed. The situation is so outrageous that a United Nations commission has condemned Detroit’s water shutoffs as a violation of international human rights. Freedom Friday marches starting at the water department building have been going on for weeks because no one should have to face forced deprivation of water, the most basic necessity of life and health. The Detroit Free Press reported Orr’s office calling the water shutoffs “a necessary part of Detroit’s restructuring.” The real agenda is to make the water department more attractive for privatization to union busters like Veolia Corp., known worldwide for its crimes against humanity, especially against the Palestinian people. While the poorest Detroiters have their water cut off for owing $150, JPMorgan Chase, UBS, Loop Financial and Morgan Stanley were paid $537 million in termination fees on interest rate swaps out of $1 billion in bonds issued from 2010 to 2013, bonds that were earmarked to fund repairs of the water infrastructure system, not line the pockets of these four banks.

The Empire Economy Does Not Work

July 9, 2014 Paul Craig Roberts, Dave Kranzler, and John Williams, www.paulcraigroberts.org Educate! Debt, Finance, Finance and the Economy, Foreign Policy, Wall Street

The third and final estimate (until the annual GDP revisions) of first quarter 2014 real GDP growth released June 25 by the US Bureau of Economic Analysis was a 2.9% contraction in GDP growth, a 5.5 percentage point difference from the January forecast of 2.6% growth. Apparently, the first quarter contraction was dismissed by those speculating in equities as weather related, as stock averages rose with the bad news. Stock market participants might be in for a second quarter surprise. The result of many years of changes made to the official inflation measures is a substantially understated inflation rate. John Williams (www.shadowstats.com) provides inflation estimates based on previous official methodology when the Consumer Price Index still represented the cost of a constant standard of living. The 1.26% inflation measure used to deflate first quarter nominal GDP is unrealistic, as Americans who make purchases are aware. A reasonable correction to the understated deflator gives a much higher first quarter contraction. The two main causes of inflation’s understatement are the substitution principle introduced during the Clinton regime and the hedonic adjustments ongoing since the 1980s that redefine price rises as quality improvements. Correcting for excessive hedonic adjustments gives a first quarter real GDP contraction of 5%. Correcting for hedonic and substitution adjustments gives a first quarter real GDP contraction of 8.5%.

July 4th, The Meaning Of Democracy

July 4, 2014 Howie Hawkins, www.howiehawkins.org Educate! Debt, Democracy, Economic Democracy, Jubilee

Because economic power translates into political power, the extreme concentration of wealth in the top 1% undermines democracy. Both main parties have colluded over the last four decades to transfer wealth to their super-rich donors, while ensuring that no meaningful reforms take place to our electoral system. The U.S. leads the industrial nations in income inequality because our electoral system is the least democratic. The sacred texts of Jews, Christians, and Muslims all call for a Jubilee every 50 years to redistribute wealth and forgive debts, not just for moral reasons, but to make the economy function again. America needs a Jubilee. The US electoral system of winner-takes-all leads to the domination by two parties, one center-right and the other far-right. The Democrats want to repeal the New Deal and the Republicans want to repeal the Enlightenment.

Argentina President Blasts US Bank ‘Extortion’

June 19, 2014 Lauren McCauley, www.commondreams.org Educate! Argentina, Banks, Debt, Finance, Supreme Court

Argentina will not submit to Wall Street's "extortion" of their debt, said President Cristina Fernández de Kirchner in a national address Tuesday night. De Kirchner's comments came after it was announced that the U.S. Supreme Court refused to hear an appeal by the South American country despite their argument that obliging predator banks would "encourage creditor free-for-alls" and "intensify and prolong the suffering of the poor in countries undergoing sovereign debt crisis." On Wednesday, following news that the Supreme Court would uphold two lower court rulings which demanded that Argentina pay $1.3 billion in debt holdouts to "vulture" funds before repaying their other restructured debts, Standard & Poor lowered the country’s rating to CCC-. According to the credit rating bureau and reported by Bloomberg News, this is the lowest rating for any nation that’s currently assessed by the company and is nine levels below "investment grade."

Is The Public Debt Legitimate?

June 12, 2014 Razmig Keucheyan, www.theguardian.com Educate! Austerity, Debt, Inequality, Occupy

As history has shown, France is capable of the best and the worst, and often in short periods of time. On the day following Marine Le Pen's Front National victory in the European elections, however, France made a decisive contribution to the reinvention of a radical politics for the 21st century. On that day, the committee for a citizen's audit on the public debt issued a 30-page report on French public debt, its origins and evolution in the past decades. The report was written by a group of experts in public finances under the coordination of Michel Husson, one of France's finest critical economists. Its conclusion is straightforward: 60% of French public debt is illegitimate. Anyone who has read a newspaper in recent years knows how important debt is to contemporary politics. As David Graeber among others has shown, we live in debtocracies, not democracies. Debt, rather than popular will, is the governing principle of our societies, through the devastating austerity policies implemented in the name of debt reduction. Debt was also a triggering cause of the most innovative social movements in recent years, the Occupy movement. If it were shown that public debts were somehow illegitimate, that citizens had a right to demand a moratorium – and even the cancellation of part of these debts – the political implications would be huge. It is hard to think of an event that would transform social life as profoundly and rapidly as the emancipation of societies from the constraints of debt. And yet this is precisely what the French report aims to do.

Chilean Artist Sets Fire To $500m Worth Of Student Debt Papers

May 19, 2014 Huffington Post UK, www.huffingtonpost.co.uk Resist! Arts, Chile, Debt, Student Activism

A heap of ashes is allegedly all that remains of $500 million in “pagarés” — or debt papers — stolen and burned by a Chilean activist. A video by Francisco Tapia, aka “Papas Fritas,” went viral this week in which he confessed to burning the legal papers certifying debt owed by Universidad del Mar students and had thus liberated the students from their debt obligations. “It’s over, it’s finished,” Tapia said in his impassioned five minute video, the Santiago Time reported. “You don’t have to pay another peso [of your student loan debt]. We have to lose our fear, our fear of being thought of as criminals because we’re poor. I am just like you, living a shitty life, and I live it day by day — this is my act of love for you.” The university is still collecting on its student loans, but not without great difficulty. The destruction of the documents occurred during a “toma” — student takeover — of the campus and means the embattled university owners must now individually sue each of its students to assure debt payment — a very costly, time-consuming process, the paper reported. Tens of thousands of students flooded the streets of Chile last year, demanding education reform. Now, it seems, tensions are escalating once again.

Congratulations, Class Of 2014: You’re Totally Screwed

May 19, 2014 Thomas Frank, www.salon.com Educate! Debt, Education, Labor

Welcome to the wide world, Class of 2014. You have by now noticed the tremendous consignment of debt that the authorities at your college have spent the last four years loading on your shoulders. It may interest you to know that the average student-loan borrower among you is now $33,000 in debt, the largest of any graduating class ever. According to a new study by the Pew Research Center, carrying that kind of debt will have certain predictable effects. It will impede your ability to accumulate wealth, for example. You will also borrow more for other things than people without debt, and naturally you will find your debt level growing, not shrinking, as the years pass. As you probably know, neither your parents nor your grandparents were required to take on this kind of burden in order to go to college. Neither are the people of your own generation in France and Germany and Argentina and Mexico. But in our country, as your commencement speaker will no doubt tell you, the universities are “excellent.” They are “world-class.” Indeed, they are all that stands between us and economic defeat by the savagely competitive peoples of Europe and Asia. So a word of thanks is in order, Class of 2014: By borrowing those colossal amounts and turning the proceeds over to the people who run our higher ed system, you have done your part to maintain American exceptionalism, to keep our competitive advantage alive.

The State Of Lending: Debt Collection And Debt Buying

May 2, 2014 Center For Responsible Learning, www.responsiblelending.org Educate! Debt

The debt collection industry is a rapidly expanding business, with revenue increasing up to 600 percent between 2003 and 2012. Private companies buy billions of dollars of charged-off debt from banks each year. The most common type of debt purchased comes from credit cards, but debt buyers also buy student loans, medical debt and more. As the industry has grown, abuses and illegal — predatory — practices have proliferated. Companies are using abusive and unlawful methods to collect on debt — too often on debt that the targeted consumers do not even owe. This chapter covers how the industry frequently operates on inaccurate and incomplete information, resulting in dire financial consequences for consumers. In the U.S., more than 1 in 7 adults is being pursued by debt collectors. The average amount of debt is $1500. In 2013, the Federal Trade Commission (FTC) received over 200,000 complaints about debt collection—the highest number of complaints on any topic other than identity theft. According to an FTC analysis, only 6 percent of debt accounts purchased by some of the largest debt buyers in 2009 came with any documentation. Overwhelmed courts make the problem worse by awarding judgments to debt buyers based on false, forged, or misleading information.

CBO: Government Annual Student Loan Profit $12 Billion

April 15, 2014 Shahien Nasiripour, www.huffingtonpost.com Educate! Debt, Education

The U.S. Department of Education is forecast to generate $127 billion in profit over the next decade from lending to college students and their families, according to the Congressional Budget Office. Beginning in the 2015-16 academic year, students and their families are forecast to pay more to borrow from the department than they did prior to last summer’s new student loan law, which set student loan interest rates based on the U.S. government's costs to borrow. The higher costs for borrowers would arrive at least a year sooner than previously predicted. James Kvaal, a top White House official, last year dismissed the possibility that student borrowers would pay higher costs under the new law. The Consumer Protection Financial Bureau on Monday warned borrowers about a "jump" in rates. The projection, made public Monday by the nonpartisan budget scorekeepers, provides the federal government’s best estimate of how much the government's student loan program will cost taxpayers.

New Shock Doctrine: ‘Doing Business’ With The World Bank

April 6, 2014 Jason Hickel, www.ajazeera.com Educate! Debt, Food and Agriculture, IMF, World Bank

In 2003 the World Bank published the first Doing Business Report, which ranks the world's countries based on the "ease of doing business" in them. For the most part, the fewer regulations a country has, the higher they score. The report has become the Bank's most influential publication, and the ranking system is recognised as a powerful tool for compelling countries to initiate regulatory reforms, driving a quarter of the 2,100 policy changes recorded since it was launched. Investors and CEOs use the rankings to decide where to move their money or headquarter their businesses for maximum profit. There's even a handy iPhone app that jet-setting capitalists can use to redirect their investments on the fly. A new minimum wage law was just passed in Haiti? Better move your sweatshop to Cambodia! Higher taxes on the rich in Sweden? Time to shift accounts to Kenya's new tax haven!

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