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A newer group grown out of Occupy called Strike Debt is making waves with their newly released Debt Resistors’ Operation Manual, available to read here with commentary from Naked Capitalism’s Yves Smith and available for download as a pdf here.

Their goal is compelling, and they state it in their manifesto on page 2:

We gave the banks the power to create money because they promised to use it to help us live healthier and more prosperous lives—not to turn us into frightened peons. They broke that promise. We are under no moral obligation to keep our promises to liars and thieves. In fact, we are morally obligated to find a way to stop this system rather than continuing to perpetuate it.

This collective act of resistance may be the only way of salvaging democracy because the campaign to plunge the world into debt is a calculated attack on the very possibility of democracy. It is an assault on our homes, our families, our communities and on the planet’s fragile ecosystems—all of which are being destroyed by endless production to pay back creditors who have done nothing to earn the wealth they demand we make for them.

To the financial establishment of the world, we have only one thing to say: We owe you nothing. To our friends, our families, our communities, to humanity and to the natural world that makes our lives possible, we owe you everything. Every dollar we take from a fraudulent subprime mortgage speculator, every dollar we withhold from the collection agency is a tiny piece of our own lives and freedom that we can give back to our communities, to those we love and we respect. These are acts of debt resistance, which come in many other forms as well: fighting for free education and healthcare, defending a foreclosed home, demanding higher wages and providing mutual aid.

Here’s what I love about this manual and this Occupy group:

• They position the current debt and money situation as a system that is changeable and that, if it isn’t working for the 99%, should be changed. Too often people assume that nothing can be done.
• They explain things about debt, credit scores, and legal rights in plain English.
• They give real advice to people with different kinds of problems. For example, here’s an excerpt for people battling a mistake in their credit report: 
• They also give advice on: understanding your medical bills, disputing incorrect bills, negotiating with credit card companies, and fighting for universal health care.
• They give background on why there’s so much student debt and mortgage debt and what the consequences of default are or could be.
• They talk about odious municipal debt, and give some background on that seedy side of finance.
• They describe predatory services for the underbanked like check-cashing services and payday lenders – they also explain in detail how to default on payday loans.
• They explain pre-paid debit cards and their possibilities.
• They talk about debt collectors and what you need to know to deal with them.
• They explain the ways to declare bankruptcy and the consequences of bankruptcy.

They explicitly create solidarity with all kinds of debtors with this conclusion: 

The threat of large-scale debt resistance is a great idea for putting pressure on the creditors to at least negotiate reasonably, as they already negotiate when large companies want to. It basically levels the playing field that already exists, i.e. addresses the double standards we have with respect to debt when we compare corporations to people (see my posts here and here for example).

In spite of this potential power in debt resistance, I have historically had reservations about the idea of asking a bunch of people, especially young people, to default on their debt, because I’m concerned for them individually – the banks, debt collection agencies, and other creditors have all the power in this situation – see this New York Times article from this morning if you don’t believe that.

Here’s the thing though: this manual does an exceptional job of educating people about the actual consequences of default, so they can understand what their options are and what they’d be getting into if they join a resistance movement. It’s actual information, written for struggling people, the very people who need this advice.

Thank you, Strike Debt, we needed this. I’m going to try to make it tomorrow morning for the protest.

I’m happy to show you that Alternative Banking now has a working blog, thanks to a newer member Nicholas Levis. He blogged recently about a Reality Sandwich event I went to last Wednesday, where David Graeber, author of Debt: the first 5000 years was speaking. Interesting and stimulating.

We also have a playing card project called “52 Shades of Greed” which is coming out soon. Check out some of the amazing art here.

Finally, we are about to launch a Kickstarter campaign for our “move your money” app, as soon as I figure out how to accept the money without doing something illegal. Please tell me if you have experience with such things!

More exciting things in the works which I can’t talk about yet. I’ll keep you updated.

You know that feeling, where you feel like a conspiracy theorist because, even though you don’t have cold hard evidence for it, you have a distinct feeling that someone is trying to thwart you even though they claim to be your friend, or thwart an idea they claim to believe in, or even worse, thwart a principle they claim to stand by?

That’s how I was feeling about Tim Geithner, and frankly the entire Obama administration, until I read “Bailout,” the recently published tell-all book by Neil Barofsky, who was put in charge of detecting and preventing fraud related to TARP.

I recently blogged about how I consider this book a call to Occupy, but I had only read the excerpt from Bloomberg at that point. Now that I’ve read the book, it’s most definitely a call to Occupy, as well as to any group or individual who still has principles and enough energy up to summon outrage.

Going back to the feeling of being a conspiracy theorist.

Nothing in this book was really new to me or really surprised me, except the fact that Barofsky was willing to write it down in black and white. Thank goodness there are still a few people who still have principles, even inside Washington.

Everything there was something I’d pieced together either working in finance, where I lost faith in the Obama administration right away when it introduced HAMP, which was clearly set up to fail homeowners, or by meeting people in the Alternative Banking group of #OWS, specifically Yves Smith, who explained the technical details of the more recent mortgage settlement, and how it is a backdoor bailout to the banks. Yet another one!

Where was the corresponding bailout for the people? Why this doublespeak, where we’d talk about moral hazard for people who have been screwed by the predatory loan industry, but the moral hazard for AIG executives getting multi-million dollar bonuses after an $85 billion bailout is just something we have to swallow, out of deference to the sanctity of contract?

And if we care so much about contracts, why do we allow companies to enter bankruptcy just to jettison pension promises but we don’t allow individuals (who are not too-big-to-fail) to renegotiate crippling student debt loads?

I’m confused no longer. It was never Geithner’s intention, or Obama’s intention, to help out the people. It has always been their intention solely to prop up a failed banking system. What they’ve been doing, rather than saying, is much more consistent with this theory anyway. Lots of roundabout efforts to explain why they’d set up a mortgage modification system to help homeowners was completely ineffective; it’s because it was actually set up to slow down foreclosures in order to “foam the runway” for banks to get back into the black. That makes much more sense!

It actually restores my faith in the Obama administration a bit. Before this I was sometimes torn between thinking they were bought by the banks or they were utterly incompetent. But now I know they aren’t entirely incompetent in the follow-through with their goals: they actually did succeed in slavishly working for the banks in the name of helping out homeowners.

Thank you, Neil Barofsky, for a great book. Thank you for maintaining your justified anger and for being courageous enough, and enough of a dick, to write it.

Jamie Dimon is meeting with Congress today. Occupy the SEC and the Alternative Banking Working Group jointly wrote a bunch of questions for the Senators to ask him. Please read the letter and some interesting facts about the Senators scheduled to talk to Dimon today on this Naked Capitalism post.

There are certain people who are obsessed with the way money is created in the U.S. – I call them “money creationists”. Some of these people are friends of mine from Occupy, and I really enjoy and like them.

But I don’t agree with them, and here’s why. Because I don’t trust politicians more than I trust bankers. I mean, don’t get me wrong, I don’t trust bankers. But I really don’t trust politicians.

The reason this comparison comes up is this. The way money is created through the Fed lending window is described here, in an article that could have been written by my friends, although I don’t think I’ve met Gar. Pay attention to the following concept which the writer is proposing:

Why, you might ask, doesn’t the Federal Reserve Board simply “create” money (as it does all the time) and lend it at 0.75 percent to the government (rather than let the banks do it) to pay for important public goods and to settle its debts? (Our bridges are falling down; not a bad thing in which to invest.)

As soon as I hear this I think, holy fuck let’s not even go there! The image of unlimited cash machines directly bankrolling the whims of Congress is just too much. But wait, here’s where the money-creationists get really confused – they give themselves away in fact:

… if a “public bank” were set up that operates just the way private banks are run today, including making profits for the owners – who in this case would obviously be the public – i.e. the government.

What? When was the last time the public is the same thing as the government? In this universe, for whatever reason, politicians have been wished away and all we have left are well-meaning would-be bridge builders facing off against evil venal bankers. But that’s not the world I live in.

To my money-creationist friends: there are stewards of the government, and they’re called politicians, and they love money. They are just as corrupt as bankers. It’s not a good idea to give them a printing press. Let’s instead think of a way to persuade them to require reasonable capital requirements of the banks so they don’t get to do crazy shit, if they can get their hands off of financial lobbyist money for more than fifteen minutes.