Rolling Jubilee: A people’s bailout


An offshoot of the Occupy Wall Street movement has launched a practical movement to help debtors.  It is called the Rolling Jubilee, named for the 50-year Jubilee decreed in the Book of Leviticus, in which all debts are forgiven and all Hebrew slaves freed.

Banks and other creditors sell off bad debt to collection agencies for pennies on the dollar, who try to get their investment back by hounding the debtors unmercifully.  Supporters of the Rolling Jubilee buy up that debt, and forgive it.

So far the Rolling Jubilee program has raised about $330,000 and managed to cancel more $6 million worth of debt.  I don’t know of any other form of charitable giving that is so highly leveraged.

I must confess that six months ago, I wondered about the future of the Occupy movement.   I liked what I saw of the Occupy Rochester people.  I gave them an old sleeping bag and some books for their library, and my church, which adjoins the public park where they were camping out, invited them in for supper one night a week.  But they seemed to me to be bogged down in their internal processes, and overly focused creating a model for an ideal anarchist society and in defending their right to camp out in public parks.  Still, with their slogan, “We Are the 99 Percent,” they got journalists to talking about the issue of concentration of wealth.

But the Occupy supporters did good work, along with other groups, in organizing help for victims of Tropical Storm Sandy.  If you’re trying to build a grass-roots movement among poor people, this is the way to do it—to be their friend all the time, and respond to their concerns rather than expecting them to support yours.  The old-time political machines understood this; modern political parties do not. And Occupy’s networked organization, based on anarchist principles, may have been more effective than a hierarchical organization would have been.

The Rolling Jubilee will do a lot of good, although it will not in and of itself solve the U.S. debt problem.   In fact, the nation’s moneylenders may try to put a stop to it before it can get started.   A group called American Homeowner Preservation tried to buy up defaulted mortgages, then allow the former owner to live in the house and pay rent, or take out a new mortgage based on the house’s lowered value.  Banks and the Federal Home Loan Mortgage Association wouldn’t cooperate.  Although they didn’t lose financially, they objected on general principles to foreclosed debtors being able to stay in their houses.   This was “moral hazard,” they said.

David Graeber, one of the original Occupy Wall Street members, says this reflects an assumption that needs to be challenged.  I agree.  If you borrow money, you are obligated to make a good-faith effort to pay it back, but the obligation to repay debt at compound interest is not the highest moral obligation.  Your moral obligation to provide for your loved ones comes before your obligation to moneylenders.  You are responsible for your own actions, but you are not responsible for the economic crash.  In fact, many of the individuals whose actions brought on the financial crash are the ones now trying to squeeze money out of unemployed students and underwater homeowners.  Strike Debt will have accomplished much if it gets us to questioning our assumptions about debt.

Click on Rolling Jubilee for Strike Debt’s home page.

Click on The Debt Resistors’ Operations Manual for a link to Strike Debt’s free on-line book, which informs debtors of their legal rights, suggests survival strategies and explains what’s wrong with the system.  I haven’t read it the whole way through, but what I’ve read is good information.

Click on Local Churches Partner With Occupy Sandy In Grass-Roots Relief Efforts for a report on the Occupy movement’s role in helping victims of Tropical Storm Sandy.

Hat tip to Making Light.

[Update 11/18/12]  Yves Smith on naked capitalism points out some potential problems with Rolling Jubilee.  The big problem is that forgiven debt may be taxable as income, so Strike Debt might be increasing the debtors’ tax liability.  And the debt forgiveness may be taxable as a gift, which Strike Debt would have to pay.

Click on Occupy Wall Street’s Debt Jubilee: A Gimmick With a Tax Risk for her whole argument.

[Update 11/19/12]  Click on Rolling where? and Rolling Jubilee: PS  for thoughtful criticism from radical economist Doug Henwood.

Click on Rortybomb on the Rolling Jubilee for Mike Konczal’s response to Henwood on The Next New Deal, the web log of the Roosevelt Institute.

Click on Rolling Jubilee – a distraction or a way forward? for more reasons for doubt from Kathleen Geier of the Washington Monthly.

I see the point of all these criticisms, but I think usury is a big problem in and of itself, and I still think the Rolling Jubilee is worth trying and a good starting point for addressing indebtedness as a public issue.

[Uodate 11/20/12]  Click on Looking Back on Occupy for a thoughtful broader look at the entire Occupy movement.

[Update 12/3/12]  Click on Why Occupy Wall Street’s Rolling Jubilee Puts Borrowers at Risk for more from Yves Smith.   Maybe Rolling Jubilee isn’t such a good idea after all.

Tags: , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: