Archive for March 1st, 2010

Getting Out of Debt – And the Debt System

Sharon March 1st, 2010

A joint essay by Keith Farnish, Guy McPherson, Dave Pollard and Sharon Astyk

Indebtedness pushes us into a form of servitude, and in extreme cases, can leave us imprisoned. Consider, for example, current rates of interest, usurious compared to what savers earn on their savings in the same banks that charge that interest. Many religious organizations loath interest rates as immoral and criminal because of their human cost. According to all four gospels in the Christian bible, even the normally passive, peaceful prophet of Christianity got so worked up about usury in a temple he started acting like Bobby Knight on the sidelines of a basketball game.  Jews were once prohibited from charging one another interest – it was something you could do only to people who you didn’t like very much anyway.  In both faiths, the profound consideration that religious texts give to the implications of indebtedness is largely erased from discussion due to its ubiquity today – we worry a lot about who has sex with whom, but not at all about who owns whom.

Purchases by consumers (this awful word is used here only because that’s what we have become — involuntarily) drive the world’s industrial economy. And purchases by consumers depend on the confidence of those consumers, so that consumer confidence underlies commercial success. If a potential consumer has no confidence in his ability to purchase an item, then he won’t. If enough potential consumers lose confidence in their abilities to purchase and pay for any particular item, the sales of that item will plummet, causing the manufacturer and sellers of that item to fail.

Considering the current financial situation, which is likel to crash again and harder, we can help create a situation that will both change behavior for the better and prevent people from getting into financial trouble. The latter portion is vital to getting wide support, and will be a huge challenge for hopelessly optimistic, reality-challenged members of the industrial economy.

How do we convince people they definitely cannot afford to take out loans to buy things? More impact will be realized by targeting luxuries such as houses, cars, and appliances than small “goods.” The Obama administration recognizes this, and has therefore rewarded people for purchasing houses, cars, and — most recently – appliances, by giving them huge financial incentives (i.e., taxes on other Americans who might not even be tempted to play the “consumer” game).  All of this has operated to keep us indebted – and to serve the stock market at the expense of the people.

Loans are required for most people to purchase these “durable goods” (which are often no longer durable or good). Loans traditionally are seen as safety nets, but it has become clear as our incomes decline  and as we can no longer count on the myth of endless economic growth, that they really represent traps.  Never mind the psychological or ecological implications of consumerism — there exists no evidence suggests anybody has minded them so far ;-)  — the focus here is on the trap into which each potential consumer falls by taking out a loans that require us to pay many times the value of what we receive. Most loans are a bad deal for the borrower, although credit cards represent the largest trap (even with the new rules).

The system needs you to keep borrowing. If you stop borrowing, then who knows what could happen.  What can you do to get out of debt, and to help others get out?  Not all of these responses will be appropriate to everyone, and some of them involve some legal risk, so understand what the risk is before you do it. 

No risk:- Don’t take out a loan for anything. If you need it — and probably you don’t — save your money and buy it, or barter for it.

 - Encourage others to join you. Start by sharing your car, your garden, your yard, and your lawnmower. Pass stuff on. Give it away. You don’t need that loan, and neither do the people you care about. Caveat: Sharing leads to liability.

 - If you already have loans, and most recent students and homeowners do, then seek deferral under economic hardship. Odds are pretty high you’re actually experiencing economic hardship, so this is no big deal. And even if you’re not, there’s no sense feeding the beast if the beast defaults down the road. Caveat: If you lie about economic hardship, your claim about hardship is legally fraudulent.

 Low risk but more Radical:

 - Start a “misinformation” campaign (from the point of view of the loan companies).

 1) Via snail mail, send out false press releases from loan companies and banks to media outlets such as local radio stations, local press and even the nationals if you are brave enough. These press releases should discourage people from taking out loans because, after all, people don’t really need all the toys they buy on credit. If you make the “press releases” as complete as possible, and word them so that responses are not required, then there is a good chance they will be run without questions being asked.

2) Do a bit of subvertising, on the internet or (for a little higher risk) on billboards: focus on loans companies and banks changing the messages to emphasise the theft aspect of loans. Alternatively, just remove loan adverts entirely. For more information on techniques, read this post.Other potential actions along these same lines include:

  • Organizing “default-ins” along the lines of the “love-ins” and “sit-ins” of the 1960s
  • Devising and publicizing satiric, fake get-rich-quick schemes that exploit government mortgage subsidies and the overvaluation of real estate: “Get $1 million in real estate free from Obama mortgage subsidy program with no risk or money down!” or “Sell real-estate short before the crash and make $1 million with no risk or cash!” (note, if  you actually try to take money for this, you will get in enormous trouble – this only works if you are joking)
  • Helping organize and formalize the exploding “gray” market for overpriced real estate: Thousands of people are moving or retiring and unable to sell their homes at anywhere near their mortgages, so they are renting out their homes for a fraction of current market rents, and likewise renting others’ homes in areas to which they are moving at far below market rents. Everyone hopes prices will somehow bounce back and save them from default but a more likely scenario includes these homeowners threatening default to get mortgage companies to write off the excess of mortgage value over real property values. We can prove useful by helping them find “gray” market properties in the interim.
  • Obvious satirical routines can be developed for a variety of venues. This strategy should hold particular appeal to artists.

    Medium risk:Walk away from your mortgages, as suggested by Dave Pollard: Many Americans are now living in homes with mortgages that are greater than the value of their property. Why would anyone continue to pay a debt that is higher than the asset it secures, unless the home provides them with substantial other value? After all, big corporations view pulling the plug on unsuccessful ventures and sticking the debtholders and shareholders a key business strategy.

    The whole idea of “risk capital” is that the interest and other fees you earn for lending to risky borrowers compensates you for the risk, so that if the borrower defaults you accept the loss and chalk it up to experience. Yet for some reason homeowners feel some moral obligation to throw good money endlessly after bad. This of course is exactly what the corporatists, who have no such moral compunction, are counting on, what economists call moral asymmetry. The logical response would be to tell the lender to write off the excess of the mortgage beyond the property value, and refinance the mortgage accordingly. Apparently in some US states (called “recourse” states) this moral asymmetry is institutionalized — that is, lenders can go after a mortgagee’s personal assets if they default. There is, of course, no recourse when the corporatists walk away from debts, offshore their operations, and stiff the taxpayers whose subsidies and bailouts paid for the corporatists’ ventures.

    Where is the sense of outrage here? Have the education system and media so dumbed down the citizens that they can’t see this scheme for the cruel and criminal con it is? If everyone with a mortgage greater than the value of their home either walked away from it, or was legally empowered to require the excess to be written off as the “bad debt” it is, then of course there would be many bank failures and plunging profits. That’s how the market system is supposed to work. The lenders, of course, want it both ways, and Obama and the citizens consumers seem blithely willing to let them have it.

    Walking away from your mortgage entails medium risk because it will damage your credit rating.  Additional risks vary among states, up to and including loss of assets for every person named on the mortgage. Via electronic communications, send out false press releases from loan companies to media outlets. These press releases would discourage people from taking out loans because, after all, citizens don’t really need all the toys they buy on credit. This scheme requires technical expertise: The instigator will hide behind an alter-ego and fake domain.

     High risk:

     Taking a step beyond abandoning your underwater mortgage, don’t pay off your mortgage even if you’re not underwater. Simply default but continue to occupy your house. Ditto for other loans (but kiss your car goodbye when the repo man does his job). In many cases, lenders can ill afford to tell their stockholders about toxic loans, so — if you avoid undue attention and your loan is too small to “bother” with — the borrower gets the loan for no payments while the lender gets stuck. This point was viewed as radical as little as a year ago, but the idea has been receiving plenty of attention from the media, and even CNBC is on board.

     These actions are high risk because they could bring criminal proceedings related to fraud. Probably they won’t. But stranger things have happened, so we issue the following disclaimer:

    Recognizing that even civil disobedience is illegal, the authors and the host of this web site do not condone any actions that break the law under the jurisdiction where the described activity is taking place.  But let’s be clear – this is civil disobedience, and in a system that is weighted, it deserves serious consideration.Which, of course, doesn’t mean you shouldn’t do them at your own risk – but understand your risk and do it with your eyes open.What we’re trying to do here is help bring down a house of cards: People feeling forced to pay debts far greater than the real value of the assets that secure them. People seduced into getting into debt needlessly. People paying usurious interest rates and fees because the banks own the politicians. It’s a debtors’ prison without locks and doors, and it’s immoral. Please help us bring an end to it.

    Independence Days – Year III

    Sharon March 1st, 2010

    Many of us need nothing in the world so much as more time.  Adding new projects is exhausting – and stressful.  And yet, we know that there are things we want to change – for example, most of us would like to grow a garden with our kids, or make sure that we know where our food comes from.  We’d like to live in communities with a greater measure of food security, we’d like to know more about what we’re eating.  We’d like to have more contact with nature, we’d like to be more self-sufficient.  We’d like to have better food at lower cost, we’d like to have a reserve for an emergency or to share.  We’d like to do more in our community and to eat with one another.  We’d like to sit down to a home cooked meal more often.

    We want these things but we don’t know how to get them, in large part because when we think about growing a garden or preserving food, or working in our community, we imagine we must allot large chunks of our time.  We imagine it is impossible – because we know we can’t pull hours every day out of our frantic schedules. 

    But what if we didn’t have to?  That’s what the Independence Days Challenge encourages all of us – busy working families and farmers, city dwellers and suburbanites and country folk – to remember.  That is, it isn’t all or nothing, we don’t have to wait until we have a whole afternoon free or are on vacation.  What if we could do it gradually, just a little bit every day or week – what if we only had to plant our few seeds today, and tomorrow, pull a couple of weeds and harvest two salads, and the next day make three jars of jam? 

    What’s amazing about this is how fast it adds up – a few minutes here and there turn into a much greater degree of self-sufficiency.  I know this because I’ve been doing it for two years as part of the Independence Days challenge. And I know it works for people like me, who farm and for whom growing and canning and harvesting are part of everyday life, and I know it works for people in the city who may have no garden space at all but a few window boxes but can still preserve some of their own when it is plentiful, reduce their waste and work at community-level food security.  No matter how much you are able to do, doing a little when you’ve got a few minutes makes the critical difference.

    Does this stuff really matter?  Is it worth your time?  I think so – as I wrote in my book _Independence Days: A Guide to Sustainable Food Storage and Preservation_,

    All of us need to devote some energy to fighting battles that will probably be lost, simply because we have an obligation to fight the good fight.  But most of us can’t live on a steady diet of tilting at windmills.  We also need to do work where we know we can accomplish something and where we know we matter.  That’s why I think food preservation and storage matter so much.  Ultimately, we are talking not only about the fairly manageable question of what to have for dinner, but also  about about transforming our society, our use of energy, our food culture, and, of course our culture as a whole.”

    Today is March 1 and the beginning of a new year in Independence Days Challenges – my third time doing this challenge. I have a lot of new readers these days, a lot of people who are reluctant to join up in the middle, so it is time to start afresh. 

    What is the Independence Days Challenge?  The name and the inspiration came from the late, great Carla Emery, who I was lucky enough to have as a friend.  She was the author of _The Encyclopedia of Country Living_ which was her way of preserving lost knowledge about how to grow, harvest, cook and preserve.  She saw the traditional ways disappearing, and she recorded them, and built upon them until by reading her book you can learn to make a BLT that starts with a piglet, a tomato seed and a field of wheat.

    She wrote about Independence Days:

    “All spring I try to plant something every day – from late February, when the early peas and spinach and garlic can go in, on up to midsummer, when the main potato crop and the late beans and lettuce go in.  Then I switch over and make it my rule to try and get something put away for the winter every single day.  That lastas until the pumpkins and sunflowers and late squash and green tomatoes are in.  Then comes the struggle to get the most out of the stored food – all winter long.  It has to be checked regularly, and you’ll need to add to that day’s menu anything that’s on the verge of spoiling, wilting or otherwise becoming useless. 

    ….

    People have to choose what they are going to struggle for.  Life is always a struggle, whether or not you’re struggling for anything worthwhile, so it might as well be for something worthwhile.  Independence days are worth struggling for.  They’re good for me, good for the country and good for growing children.”

    Carla reminded me that I don’t have to plan a weekend with my canning kettle to make jam, that I don’t have to spend all my time at the community food center to make a difference there.  And I found that when I sat down and tallied up everything I accomplished in each season of the year, I was doing more than I thought I was.  And you will too.

    So how does it work?  Well, first of all, you can take that awesome image that Robj kindly made for us, and put it up on your blog or website to let people know about the challenge.  Second of all, all you have to do to sign up is to post in comments here that you are joining in – and if you can’t start today, well, join in later!

    Then, just once a week (or when you get to it) commit to writing down what you’ve accomplished.  You can post it in comments here at the blog, or you can put it up on your blog and include a link.  That’s pretty much all there is to it.  The only rule is this – don’t tell us what you didn’t do.  Don’t compare yourself to everyone else.  Don’t look and say “but I never…”  Because the reality is that it is always easy to see where you didn’t do things, or to see where you haven’t done enough, and that blinds us to what we have accomplished. This is about our successes.

    What actions count?  Well, we’ve got seven categories here, and anything you deem to fit counts as an accomplishment.  Here are the categories:

    1. Plant something – This is obviously something that many of us are doing now anyway, but it should be a reminder that gardening isn’t “put in the garden on memorial day and that’s it” – most of us can grow over a longer season than we do,  and enjoy fresh foods grown through spring, summer and fall, and even into or through winter in many places.  Even if you live in an apartment, you can sprout seeds.  So keep on planting!

    2. Harvest something - Folks in the Southern Hemisphere are doing this full swing, but as soon as you pick the first dandelion from your yard, it counts if you ate it or preserved it.  Don’t forget to include food you forage – whether from wild marginal areas, or even just from the neighbor’s trees that he never harvests (ask, obviously).

    3. Preserve something – For me this starts as soon as the asparagus, nettles and rhubarb are up.  Canning looks like a big scary project if you have to can a truckload of green beans on a hot day in July.  Dehydrating seems overwhelming if you have to pick the pits out of 4 bushels of plums in a single afternoon when you’d rather be doing something else.  And yes, sometimes everything comes ripe at once, some big jobs can’t be avoided, and you just put on the loud rock and roll and go at it.  But a little at a time is possible, you can be canning corn relish while you are washing up from dinner, or stick the strawberries in the sun to dry on your way out the door.  Natural cool storage can take two minutes.  Starting a batch of pickles takes five.  It doesn’t have to be overwhelming – and it is a way to preserve what is plentiful, inexpensive, delicious and healthy for a time when there is less of it.

    4. Waste Not–  Once you’ve got food, whether purchased or home preserved, you have to keep an eye on it – we waste nearly half of all food, much of it in our homes.  In this category goes making sure you use what you buy or grow, cutting down on garbage production by minimizing packaging and purchasing, composting, reducing community waste by composting or feeding scraps to your animals, and taking care of your food storage – everything from keeping records and writing dates on jars to checking the apples and making sauce when they start getting soft.  BTW, reduce waste also refers to money and energy – stretching out your trips to the store and not “spending” gas on your food, cutting your grocery budget and reducing cooking energy.  These are things that are good for the planet and good for all of us.

    5.  Want Not – This is the category where you report the stuff you’ve done to get ready that isn’t growing/storing/preserving food.  That means the food you buy for storage, the things you build, scavenge, rescue and repair that get you further down the path.  Did you get a good deal at goodwill?  Biu om bulk or with coupons?  Scavenge some cinder blocks for your raised bed building project?  Share with a neighbor?  Find a grain mill on Craigslist? Buy some more rice and put it away?  Inventory the medicine cabinet? Pick up a new book that will be helpful?  Tell us!  The reality is that every nation, every government agency concerned with the security of its citizens, assumes that most people will be able to handle a short term emergency or service disruption themselves – but most of us can’t.  There are people who simply can’t prepare – they lack the ability to do so.  But if you aren’t one of them – if you can do even a little, you can make sure that when help is offered, it goes to the people who truly need it. Moreover, you can make sure you are there and able to help others when it is needed. 

    6. Build Community Food Systems – Great, we’re all doing this stuff at home.  But what did you do to help spread the message, because that may even be more important.  Did you talk about your victory garden at your kid’s school?  Offer to share space with a neighbor in your sunny yard?  
    Pick up some groceries for a neighbor who doesn’t drive anymore?  Bring a casserole over to the family that lost their job or moved in?  Donate to your food pantry?  Teach the neighbor kids to make yogurt?  Offer to teach a canning class?  Show someone else where the nettles are growing wild?  Talk about your food storage or gardening plans?  Share a plant division or seeds? Help out with the food pantry garden?  Give a talk about the importance of small local farms?  Run for your zoning board?  The first line of security for all of us is each other – we are all enriched by a more food-secure community.

    7. Eat the Food – Sometimes I think people have more trouble actually eating their garden produce or CSA shares than they do growing or buying them.  Ultimately, eaters have more power over our agricultural future than they know – farmers can’t necessarily lead the way – they have to sell what eaters want.  So cooking and eating are the way we will change the food system.  This is where you tell us about the new recipes you tried, or the old ones you adapted to new ingredients, about how you are actually eating what you store and store what you eat, or getting your kids to try the kale. 

    Welcome to year three!!!!

    Sharon