The idea of the "99 percent" managed to do something that no one has done in the United States since the Great Depression: revive the concept of social class as a political issue. What made this possible was a subtle change in the very nature of class power in this country, which, I have come to realize, has everything to do with debt.
As a member of the team that came up with the slogan "We Are the 99 Percent," I can attest that we weren't thinking of inequality or even simply class but specifically of class power. It's now clear that the 1 percent are the creditors: those who are able to turn their wealth into political influence and their political influence back into wealth again. The overriding imperative of government policy is to do whatever it takes, using all available tools—fiscal, monetary, political, even military—to keep stock prices from falling. The most powerful empire on earth seems to exist first and foremost to guarantee the stream of wealth flowing into the hands of that tiny proportion of its population who hold financial assets. This allows an ever-increasing amount of wealth to flow back into the system of legalized bribery that American politics has effectively become.
When we were organizing the Wall Street occupation in August of 2011, we really didn't have any clear idea who, if anyone, would actually show up. But almost immediately we noticed a pattern. The overwhelming majority of Occupiers were, in one way or another, refugees of the American debt system.The Nation
Can Debt Spark a Revolution?
David Graeber | Reader in Social Anthropology, Goldsmiths, University of London
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From Margrit Kennedy's FINANCIAL STABILITY - A CASE FOR COMPLEMENTARY CURRENCIES
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In the late seventies, environmentalists – among which I count myself - were among the first to question, why economic reasoning demanded exponential growth returns that the planet could never sustain. We discovered that there was severe lack of understanding of the most basic facts about money amongst laymen as well as professional economists.
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The ‘Transparency Misconception’ deals with the second major difficulty in fully understanding the impact of the interest mechanism on our economic system. Most people think that they pay interest only if they borrow money. They do not understand the fact that every price contains a certain amount of interest, depending on the share of capital deployed per unit of output. This relationship – together with the rate of interest – determines the interest component in prices. For the three following examples from Germany, it ranges from a 12 % interest component in the price for garbage collection (because here the share of capital costs is relatively low and the share of physical labor is particularly high) to 38% for drinking water - and up to 77% in the rent for public housing (when calculated over 100 years, which is the estimated time houses in Germany are supposed to last). On average, people in Germany pay about 45% interest in the prices of goods and services they need for their life.
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The ‘Fairness Misconception’ is based on the notion that everyone is treated equally in our monetary system. We all have to pay interest when borrowing money and receive interest for savings. However, when we take a closer look, there are indeed huge differences as to who profits and who pays in this system. Comparing the average interest payments and income from interest in ten equal parts of 2.5 million households in Germany, we can show that 80% of the population pay almost twice as much as they receive, 10% receive slightly more than they pay, and the remaining 10% receive more than twice as much interest as they pay.
Debt relief is a potentially useful step for reliving the pain of the current crisis. But it is not a structural solution to persistent social and economic disorder. Graeber does not present a compelling grasp the issues, IMO. The Occupy movement needs a bit more socialism, and quite a bit less anarchism.
Equality, solidarity, work, democracy, and a strong social contract of mutual obligations - these should be the themes.
And sadly, it is not so simple as believing that all the creditors are in the 1%. In capitalist society, there are creditors everywhere. Everyone with a 401K is a creditor.
A question about the financial crisis…
A premise: what lenders need is borrowers that can make their payments.
Therefore, nstead of bailing out the banks, would bailing out borrowers have indirectly bailed out the banks?
If in response to the crisis in 2007-2008: (a) the U.S. government issued every taxpayer a unique bank account with a credit of $15,000, (b) stipulation that withdraws for cash could not be made, but checks could be written on the account toward creditors, and (c) an application process for those people NOT in debt, whereby through proving that they have no debt, they could have the $15,000 released into their commercial checking account.
Would that have effectively solved the crisis?
1) Banks are fine because debt-service payments are likely covered for many years
2) Borrowers are fine because they can service their debt (with or without a job loss)
3) Aggregate demand is given an immediate boost for those non-indebted new disposable income.
It seems like solving this crisis, and much of the downward spiral in unemployment, should have been very easy. And it's progressive stimulus.
What am I missing?
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