[-empyre-] Debt Culture--types of debt

Annie McClanahan anniejmcclanahan at gmail.com
Sat Nov 24 11:45:59 EST 2012

I'm not 100% sure what you mean, but certainly anybody can sign the pledge,
and it applies to all loans. What I don't know is what kinds of power the
non-US banks have over defaulting debtors in the US (i.e. what they can do
in terms of garnishing wages, taking the debtor to court, etc.): I would
guess that they have less than the US government does over federal loans,
and also less than US private banks have over private loans. Which would
make intentional default on those sorts of loans *relatively* "easy"--scare
quotes decisively intended! But I actually know very little about the
international student loan market (it's a very very small percentage of the
total) so maybe other folks know more...?

On Fri, Nov 23, 2012 at 11:42 AM, Erin Obodiac <emo57 at cornell.edu> wrote:

> Hi all,
> I had a practical question about the student debtors' pledge: how does all
> of this work for student loans from non-US banks--foreign banks that
> provide loans for students to study in the US?
> Erin
> ________________________________________
> From: empyre-bounces at lists.cofa.unsw.edu.au [
> empyre-bounces at lists.cofa.unsw.edu.au] on behalf of Brian Holmes [
> bhcontinentaldrift at gmail.com]
> Sent: Thursday, November 22, 2012 7:40 PM
> To: empyre at lists.cofa.unsw.edu.au
> Subject: Re: [-empyre-] Debt Culture--types of debt
> On 11/21/2012 03:14 PM, Annie McClanahan wrote:
> > Because the state is so incredibly powerful, any student debt mass
> > default/debt strike movement would have to set up really powerful
> > structures for mutual aid. That's why I find the Student Debtor's Pledge
> > (http://www.occupystudentdebtcampaign.org/student-pledge/) in which
> > signers pledge to default once 1 million others have similarly promised
> > a much more powerful organizing model than the Rolling Jubilee (which
> > uses a philanthropic system to collectively buy back non-secured loans,
> > anonymously, but in no way threatens the debt system as a whole
> I agree with the above, signed the plege almost a year ago (as adjunct
> faculty) and began researching about student debt, writing about it and
> talking about it publicly whenever possible. However, the sobering thing
> is that to date, only some 4,500 debtors have signed that pledge, and
> only some 600 faculty. Like Annie, I doubt the moral argument is the
> decisive one that stops people from taking action. The stronger forces
> appear to be fear of the legal system and simple apathy, or the sense
> that one has no agency whatsoever to effect change. Perhaps a third
> force is self-interest, since the expansion of the university system
> from the 1970s up to 2008 was predicated (without anybody ever talking
> about it) on each university's capacity to draw in the revenue stream of
> student debt. And it's still going on.
> How can crippling debt become an issue on campus, given that the
> students have yet to be affected by it, while the faculty are actually
> paid with student debt? How to break the status quo of isolation and
> corruption? What can we do to transform the basis of social solidarity
> that Annie talks about in her post?
> One of the things that always interested me was how the rebellious
> students of the 1960s were reintegrated to the capitalist system after a
> decade of deep disaffection. In the late 1990s, the rhetorical
> mechanisms of this reintegration were demonstrated in books like "The
> Conquest of Cool" by Thomas Frank or (with a more extensive sociological
> apparatus) "The New Spirit of Capitalism" by Boltanski and Chiapello.
> The basic idea was that changes in marketing and management styles had
> put to rest the alienation experienced by young cadres in the 1960s and
> 70s, to the point where we were living in a new kind of networked dream
> world (a new ideology). Demonstrating this in detail seemed like a
> breakthrough at the time. Yet the magnitude of the current problem makes
> that work appear totally inadequate.
> In fact the crisis of the 1970s, and the threat it posed to capitalism
> as a whole, was overcome through a tremendous expansion of middle-class
> status, representing not merely an ideological but also an economic
> cooptation of those who were needed to manage the major social
> transformations that we call globalization. From the 70s onwards the
> core functions of governance became Trilateral (US-Western Europe-Japan)
> and a transnational capitalist class gradually emerged (as described by
> Leslie Sklair or William Robinson). The 1990s and especially the 2000s
> were marked by the urban phenomenon of megagentrification, or the
> construction of giant new metropolitan centers to serve this new class,
> whether in Asia, Eastern Europe, Latin America, or in the older core
> regions. Today, the Trilateral envelope has been ruptured. State,
> financial, corporate and millitary actors now have to contend with
> sovereign forces across the entire planet. Members of the global middle
> classes (that's us) use computer networks to contact peers across the
> world, to organize business, pleasure, or occasionally, revolt. But how
> did this occur? How did we get here?
> Right now I'm reading "The New Depression" by Richard Duncan, who gives
> a surprising answer (you can also read a long interview with him, posted
> for free at newleftreview.org). According to Duncan, we got here by
> shifting from capitalism to creditism. In 1968, Johnson revoked the law
> requiring the US to back its currency with 25% reserves in gold. The
> Bretton-Woods system then collapsed in 1971, and not only did the
> world's currencies begin to float against each other, but also the US
> began issuing increasing amounts of paper and electronic dollars.
> Meanwhile we began importing far more than we exported. Corporations in
> the producer countries, especially Japan and later China, ended up with
> the excess dollars. The governments of those countries then printed more
> of their own money, bought up the dollars, and invested them in US bonds
> (including huge amounts of government-backed housing bonds). All this
> sovereign money creation served as the basis for the issuance by private
> banks of much larger amounts of credit -- and the capitalist system
> expanded wildly on the basis of what Marx would have called "fictitious
> capital."
> The point, however, is that the fiction was effective. The endless
> factories and entirely new cities that now cover the coastline of China
> are there to prove it -- and on a smaller scale, you might also have a
> look at the shiny new physical plant and complex corporate and
> international partnerships of all the more successful universities. The
> global middle classes were created and integrated to the neoliberal
> version of capitalism by means of a credit bubble that has expanded
> continuously since the 1970s.
> Since 2007, the Federal Reserve has isued many trillions more dollars
> worth of this imaginary but effective money, most recently via the QE3
> program that is designed to pump out $40 billion *per month* for an
> indefinite period. This is being used to go on bailing out the banks and
> sovereign investors by purchasing toxic assets, especially those based
> on mortgages, which account for some 40% of total US debt. The immediate
> effect of quantitative easing is to reflate stock and commodity prices
> (incidentally sending food prices through the roof). Over the middle
> term, the aim appears to be to bring everything back to the status quo
> ante. The current economic model - from wage stagnation and predatory
> lending to global just-in-time production and devastating climate change
> - is being propped up by the Fed with help from the EU, Japan and China.
> It is as though they believed a new expansion of capitalism were
> possible, that all the currently disaffected people could be brought
> back into the system once again, and that we could end up with a fully
> integrated global governance: the scenario of the 1980s and 90s,
> reloaded at a higher power.
> The other, undiscussed but in my view far more likely scenario, is one
> of major breakdowns in international economic relations, resulting in
> conflicts exacerbated by climate change. Something like a variation on
> WWII, a rolling planetary civil war whose first act has been the Arab
> Spring - arguably sparked by the historic rise in food prices in 2010.
> How to make student debt a focus of struggle on college campuses? How to
> challenge the reckless pursuit of creditism on the global scale? The
> questions are linked. Because of the orders of complexity involved, only
> the university can produce a counter-discourse to the neoliberal
> creditism that currently governs our planetary society. But we know how
> the university works: people just get lost in all that complexity. Only
> a social movement of students, grads, adjuncts and (with more
> difficulty) professors, acting in solidarity with the other debtors in
> our societies, can give such a counter-discourse the force of acts, the
> real power to refuse the status quo.
> let's do it, Brian
> _______________________________________________
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