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It’s fascinated me for a while how people use language to indicated the relationship between money and morality. David Graeber’s book about debt took this issue on directly, but even before reading it I had noticed the disconnect between individual debt and corporate debt.

It was clear from my experience in finance that debt is something that, at the corporate level, is considered important – you are foolish not to be in debt, because it means you’re not taking advantage of the growth opportunities that the business climate affords you. In fact you should maximize your debt within “reasonable” estimates of its risk. Notable this is called leveraging your equity, a term which if anything sounds like a power move.

That just describes the taking on of debt, which for an individual is something they are likely not going to describe with such bravado, since they’d be forced to use measly terms such as “I got a loan”. What about when you’re in trouble with too much debt?

My favorite term is debt restructuring, used exclusively at the corporate (or governmental) level. It makes defaulting on ones debt a business decision by a struggling airline or what have you, and the underlying tone is sympathy, because don’t we want our airlines (or other american companies) to succeed?

When you compare this language and its implied morality (neutral) to the moralistic preaching of late-night talk radio, it’s quite stark. It’s made clear on such shows that debt is a sin, that the reason the show is a success is that it’s entertainment to hear how messed up the callers’ finances are, and to hear the radio host drill into their most private details in the name of ferreting out that sin.

The Suzy Ormon show is another example of this, and this blog entry is a great description of the emotional and spiritual repentance required in our culture when one is in debt, bizarrely combined with her urging you to go out and consume some more.

For the individual there is no debt restructuring available – at best you can get your debt consolidated, but the people who do that are themselves considered icky. There’s no clean way to deal with out-of-control debt as an individual.

Until now! I found an interesting article the other day which somehow excludes certain people from the moral failing of being in debt – namely, if they have the help of another powerful buzzword – a moral reclamation if you will – namely, “entrepreneur.” Because we all want our entrepreneurs to succeed!

The fact that the program doesn’t apply to most of a typical person’s student debt load is only partly relevant – for me, the fascinating part is the way that, when you stick in the word “entrepreneur,” you suddenly have the vision of someone who shouldn’t be saddled with debt, who is immediately forgiven for their sins. It brings up the question, can we perform this moral cleansing for other groups of people who are currently in debt?

What if we coopted the language of the corporations for the individual? I’d love to hear people talking about large-scale restructuring of their debt. Just the phrase makes me realize its possibilities. One of the main tools of leverage for such talks is the amount of money on the table. If sufficiently many people got together to formally restructure their credit card debts, what would the banks do? What could they do except negotiate?

Here’s a graphic I like just in case you haven’t seen it yet:

I get a lot of different responses when I tell people I’m heavily involved with the Alternative Banking group at #OWS. I find myself explaining, time after time, why it is I am doing this, even though I have a full-time job and three children (let’s just say that my once active knitting circle hasn’t met in a while).

I was not particularly activist before this. In fact I went to UC Berkeley for college and managed to never become politically involved, except for two anti-Gulf war protests in San Francisco which were practically required. While my best friend Becky was painting banners in protest of the U.S. involvement in El Salvador, I was studying tensor products and class field theory.

It’s true that I’ve been much more involved in food-based charities like Fair Foods since high school. One of the most attractive things about Fair Foods was that it acts as an outsider to the system, creating a network of gifts (of primarily food and lumber) which was on the one hand refreshingly generous, based on trust, and the other hand small enough to understand and affect personally.

I, like many people, figured that the political system was too big to affect. After all, it was enormous, did lots of very reasonable things and some unreasonable things; it didn’t solve every problem like hunger and crime, but the people running it were presumably doing their best with incomplete information. Even if those people didn’t know what they were doing, I didn’t know how to change the system. In short, I wasn’t an expert myself, so I deferred to the experts.

Same goes with the economic system. I assumed that the people in charge knew what they were doing when they set it up. I was so trusting, in fact, that I left my academic job and went to work at a hedge fund to “be in business”. I had essentially no moral judgement one way or the other about the financial system.

Once I got there, though, I had a front row seat to the unfolding crisis. As I wrote about, I got to see former Treasury Secretaries and Fed Chairman explain how shitty the securitized products are, that were currently being sold all around the world, and how they had no idea what to do about it except to tell everyone to get the hell out (which we can see has been harder for some than for others).

That meeting wasn’t the only clue I received that pointed to one thing: the experts had no idea what they are doing. The system was based on an overwhelming arrogance and network of vested interests. My conclusion as well as many other people’s.

On the other hand, it was a crisis. It was a fantastic opportunity to set up a better system. The optimist in me assumed that we would. I applied to work for the regulators to be part of the solution. When I didn’t get any offers I worked for a risk company instead.

After two years in risk, and no new system, I had to admit that there was no reason for optimism. The system is still being controlled by the same group of arrogant architects who argue that we can’t change it because then it would collapse. There’s always a problem with asking people on the inside to fix their problems. The politicians don’t understand enough about the financial system to know what to do, and the financial lobbyists telling them what to do are always protecting the banks.

Once I lost faith in fixing the problems, I felt pretty hopeless. I left finance, and considered working for a food-based charity in New York, but finally decided to stay a nerd since that’s what makes me happiest. I started this blog in a moment of hope that something as small as explaining how quants do modeling could be interesting to someone, that maybe the techniques used for so much destruction could also be used for construction.

Then something happened. It was the #OWS protest. I started going down to see if I could get people interested in talking about the financial system. Mostly people were only tepid, but sometimes people really wanted to know. I kept looking for a working group that would focus on this, and eventually I found one.

People talk about how the protesters are a bunch of lazy dirty hippies. There is certainly a group of people who don’t have access to baths, and there are people there who don’t work regularly (although that’s one reason they are there to protest). In fact there are some downright annoying people in the mix as well. But if you focus on those people, you are missing the point entirely. People also say they’re sympathetic, but that there’s no chance we could ever make a difference. I also politely disagree.

What this movement has done is to create a new opportunity for people to try to fix the system. I’m not saying I am 100% convinced it will work; in my practical-minded way, I think the best-case scenario is more like, we will influence the conversation.

But maybe influencing is enough, considering that very few people think things are working right now. At the policy level, we need to influence the conversation in the direction of showing what else could be done, rather than letting things stay the same for lack of a better plan. At the individual level we need to continue what has already begun: getting people interested and informed about the system and how it affects their everyday lives.

What’s the worst-case scenario? We have already seen it: it’s the past 4 years of doing nothing and letting the economy fall apart with no plan for improvement. The #OWS movement has already brought about a meaningful and hugely important conversation, and a sense of involvement by ordinary people, about what experts are doing with their lives.

This emerging conversation is perfectly illustrated in this Bloomberg article – not the article itself, which is strangely self-contradictory and even journalistically dishonest (it tells people to take their money out of Wall Street by investing with Vanguard in the stock market), but the comments on this article are some of the best comments I’ve ever seen on a business-oriented website. People are no longer letting themselves be spoon-fed bullshit.

The dirty hippies are a distraction, and the people who admit the system is broken but who obsess about them need to stop complaining about the embarrassing image and figure out how to help. People who think that we will never accomplish something without a few key experts should contact those experts and invite them to the meetings. Or tell me who they are and I’ll invite them. It’s time to try.