The “People’s Bailout” was Just the Beginning: What’s Next for Strike Debt?

Fabien Tepper
Yes! Magazine / News Report
Published: Friday 14 December 2012
Strike Debt, which grew out of Occupy Wall Street, wants to foment conversation about the debt we rack up in pursuit of basic needs, and the industries that profit from that debt.
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Syracuse University art professor Thomas Gokey earned his Master of Fine Arts degree five years ago, but remains chained to his alma mater by $49,983 of debt. As a recent graduate, the prospect of indefinite payments compelled him to make an art piece in which he put his debt up for sale in reconstituted squares of shredded money from the Federal Reserve. The piece was called "Total Amount of Money Rendered in Exchange for a Masters of Fine Arts Degree to the School of the Art Institute of Chicago, Pulped into Four Sheets of Paper."

The project got good press, but the debt remained. Three years later, Gokey helped create the Rolling Jubilee, a "People's Bailout" project which has raised over $465,000. With that money, the activist group Strike Debt plans to buy $9 million of Americans' medical and educational debt for pennies on the dollar—and then cancel it.

Strike Debt, which grew out of Occupy Wall Street, wants to foment conversation about the debt we rack up in pursuit of basic needs, and the industries that profit from that debt. Gokey is currently on a year-long unpaid leave from teaching to help organize the Rolling Jubilee and upcoming Strike Debt projects.

Fabien Tepper: How did you come to be interested in debt, and how did you decide to talk about it through your artwork?

Thomas Gokey: Well, I tend to make work about what I'm thinking about. And debt really controls my life—it's just this massive burden. I came up with that particular project in 2007 to '08, after I graduated from art school.

I was thinking, my diploma is just a piece of paper, and it costs all this money. And our money is just pieces of paper that are more or less worthless, but we treat them as valuable because they are "legal tender for all debts public and private." So we're basically passing around these pieces of paper with IOUs on them. And a lot of artwork is just worthless material, like a piece of paper with some charcoal marks on it. So part of what I got really interested in was, how do we put value on these priceless things?

What I was trying to play around with in that piece was to convert my tuition debt into a priceless work of art that I could sell for the amount of my tuition debt. It's made out of real money that I procured from the Federal Reserve after they had shredded it.

Now, since I'm an educator, I'm thinking about the ways in which my students and I seem to be getting taken advantage of. At some point in my classes we stop and we pause and we look at how much it's costing each one of my students to take one of my classes, and how much I'm getting paid to teach the class. And we look at each other and think, why don't we just go hold our classes at the public library? Somebody's obviously making money off both of us, so can't we cut out that middleman and focus on education?

So yes, I've been dancing to the tune that my debt calls for ten years now. We're supposed to be "the land of the free" yet all of my choices are being made for me by the market. We have a system where they say, in order to meet your basic needs you have to turn over a large amount of your freedom to this market system that's really designed to take money from you and give it to Wall Street.

Fabien: What kinds of choices are being made for you by the market?

Thomas: Well, like many people, it's what kind of work I can do. Think about people who are going into law school who say, “I want to become a lawyer because I want to defend poor people in court.” By the time they finish law school, they've got $200,000 in debt, and they need to work for a corporate law firm in order to pay it back. The main reason they got into law is now removed.

The debt has this massive power to discipline us, rather than allowing us to discipline ourselves. I mean, I don't live where I want to live. I recently relocated to Chattanooga, Tenn., whereas my art career would be better served if I lived in New York. But I can either pay Brooklyn rent or I can pay my tuition debt. I can't pay both. People are losing their houses because they've got medical debt—two thirds of all bankruptcies have medical debt as a contributing factor, and that's just immoral. No one should have to go into debt to receive basic medical care.

And, I look at my students. First of all, I look at what kind of students end up in my classroom, and I notice that they're not very representative of the country as a whole. The main thing our university system produces is class difference. People on the poorest end of the spectrum get locked out of the system altogether; they never show up in my classroom. People who are wealthy enough that their parents can just write a check, they graduate debt-free and pass go and collect $200. And for everyone in the middle, the price of entry is to take on decades worth of crushing debt.

It infuriates me, because I actually care about education, and I'm trying to produce this dangerous education that is going to be liberating—because that's what the liberal arts are supposed to do, they're supposed to liberate you. Yet now there's no liberation going on at all—it's the exact opposite. It's line up and sacrifice the next decades of your life doing things you don't want to do, to pay for this education that you supposedly need.

Fabien: How did Strike Debt's organizers find each other and come up with the idea of Rolling Jubilee?

Thomas: This idea has been floating around activist circles for a couple of years. I first encountered it in Zuccotti Park last October, and I thought, this is a brilliant idea—somebody needs to make it happen. And everyone said, “Okay, well you make it happen.”

So I've been working on it for 14 months now, and Strike Debt itself formed after May Day. We saw in the park that debt was one of the ties that binds the 99% together. A lot of us there just had this massive amount of debt and no adequate work to pay it back.

There had already been other working groups formed—the Occupy Student Debt Campaign, the Occupy Theory group, and Occupy University—some of the more active and forward-thinking groups. So we met in May, and decided to hold some assemblies around debt. At first we just said, let's come and talk about debt. Let's talk about the way in which debt has been controlling our lives. And that had a pretty powerful emotional effect—I know Chris Kasper wrote a short piece for YES! about his own personal experience, of just being able to talk openly and honestly about debt.

And then we focused on learning more about how debt actually works, and how we can protect ourselves, and how we can fight back. So we researched and wrote the Debt Resistors Operations Manual, and released that on September 17. And then, after I had been working on the Rolling Jubilee for a long time, Strike Debt was a perfect working group to take it and amplify it. So it turned out to be bigger and more amazing than I ever could have imagined, because it really was this collective project.

We've got lots of other ideas up our sleeves. The dream is to create a global, nonviolent, non-cooperation campaign focused around debt. What would a Gandhian mass refusal campaign look like? We're several years away from being able to call for something like a global debt strike or a global jubilee, but we're working towards that. Strike Debt covers a diversity of tactics, all of them nonviolent, all of them imaginative. People haven't seen anything yet. The stuff we've got in store is going to be bigger and more amazing, but it's going to take months’ and in some cases years’ worth of hard work to actually realize them.

Fabien: Did any roadblocks crop up while you while you were preparing for the Rolling Jubilee? Anything other people could learn from?

Thomas: Oh, yes. There have been many times where I've just thought, this isn't going to work—this is not possible—and despaired. One of the early roadblocks was that we needed lawyers to work with us, and I didn't know any lawyers. The best way to meet lawyers who are willing to work on causes like this is to go get arrested doing something for Occupy Wall Street. It turns out you've got a couple of days in jail to talk to all the lawyers who are in jail with you, because they got arrested with you. So that helped us clear some hurdles. I guess the advice is, if you get stuck, go get arrested with some of the best people in the world, and then brainstorm.

Fabien: I understand that a major goal of this campaign has been to start conversations. Have there been any conversations that have surprised you?

Thomas: Oh, it's been beautiful to watch. On websites, especially conservative web sites, some people are saying, “Wait a second, these debts really are illegitimate.” And then other people are saying, “They knew what they were signing up for,” and then people are sharing their personal stories.

There was one kid on Facebook who said, “I don't like this idea. People should just be responsible with their money and not end up in debt.” And then someone else responded to that and said, “I've been extremely responsible with my finances, but what are you supposed to do when you get cancer and you lose your job, and I've got this amount of debt? Tell me what I did wrong.”

And the kid said, “Well, that is wrong. You shouldn't end up with that.”

Exactly what we were hoping to happen happened, and it's continuing to happen. The Rolling Jubilee is a tactic that is meant to get the conversation started, and to direct that conversation toward particular areas of injustice. Most people didn't know that there is a secondary market for debt, and that banks sell the debt they're expecting you to pay full price for to each other for a fraction of the price.

And there are many other injustices out there that we are hoping to use the Rolling Jubilee to focus the national conversation around. This is something that we see coming up in different phases. In phase one, we're focusing on medical debt. In the second phase, three or four months from now, we might focus on a different kind of debt, or on a particularly egregious practice that we would like to get shut down. So stay tuned. We've got big dreams and big schemes.

Fabien: Have any fresh insights or directions arisen from the new regional chapters of Strike Debt?

Thomas: I'm a part of one these new regional chapters. I never have actually lived in New York City, and I just recently relocated to Chattanooga, where we're having our first meeting on Saturday.

About three weeks ago, we started seeing Strike Debt chapters pop up everywhere. Philadelphia and San Francisco were the first ones, and Strike Debt Chicago is looking like they've got a lot of energy and good ideas. I can't even keep track of all the different affiliates, but I'm hoping that this will create mutual aid networks on a local basis, so that when we mobilize a mass refusal campaign a couple years from now, we'll actually have some infrastructure in place that can support that.

You can't just call for a debt strike. It doesn't work that way. Just like you can't just call for a general strike. You have to put in the legwork and organizing that will make it possible. So, I'm super-excited. The big, pressing question that we're focused on in Strike Debt right now is how to coordinate all these chapters, how to make the most of this moment, and how to use it for long-term movement building.

 Fabien: What are some ways that people can participate?

 Thomas: The first thing they can do is download the Debt Resistors Operation Manual. If they're near a city that has a Strike Debt affiliate popping up, they can go attend an assembly. Or they can start an assembly.

If you go to the Strikedebt.org web site, we have created a Strike Debt Organizers Kit that's full of practical things for people to do right now. A couple months from now we're hoping to roll out some additional projects. But for right now it's reading the manual, meeting with your neighbors, and forming local Strike Debt affiliates. We're encouraging people to hold open debtor's assemblies, where you start talking openly about how debt functions in your own life.

And one thing that we want everyone to do is to study how municipal debt functions in your own city. We know to some degree how it's functioning in New York City, but I don't know how it's functioning in Chicago or Los Angeles. So that's a research project, to figure out how debt works where you live.

We have also called for a debtor's summit on Martin Luther King, Jr. Day, where we can start talking about some of these bigger goals for the movement, like organizing something resembling a debtors' union that you can join.

Locally, in Chattanooga, I've got some ideas that I'm going to propose for ways that we can combat payday lending. Payday loans really shouldn't exist—they used to be illegal in the 70s, and then the courts made them legal. I've also got some ideas about how to shut down these cash-checking services for the poorest workers in our society, who are unbanked. They've got poor enough credit that they can't have a bank account, or they can't have a bank account because it will get garnished. But they need a way to cash their paychecks, and these cash-checking services charge them money to get paid, basically.

I think we can start organizing, as a mutual aid project, a coordinated way for people to cash their paychecks if they can't open their own checking account. Kind of like a Strike Debt cash-checking service that's zero-interest, zero-fee. It’s the kind of thing that has to be implemented on the local level to make it happen.

I'm hoping Strike Debt is going to mutate in a lot of interesting ways, and I'm expecting lots and lots of surprises.

Fabien: According to RollingJubilee.org, you've raised enough money to abolish about $8.7 million in debt. How much debt has been bought to date?

Thomas: This process takes some time. On November 12 or so, shortly before the telethon, we closed on our first debt purchase. We had raised $5,000, which we spent to purchase $100,000 worth of medical debt.

We are in the process of lining up a bigger buy as we speak, but I don't know how long it's going to take. There's a certain due-diligence process that needs to take place, and a lot of research and reviewing different portfolios. We're in the middle of that now, and we'll act on that as soon as we possibly can.

In the future, we are going to be looking beyond medical debt, toward other kinds of debt. But as a conservative estimate, we should be able to abolish 20 times the amount of money we raised, even factoring in all of the associated costs of the process, like accounting and mailing letters to debtors informing them their debt has been abolished,.

We won't know for sure how much debt we can abolish until we actually abolish it, but 5 cents on the dollar is conservative. You can find out-of-statute debt that is being sold for one tenth of one penny on the dollar. This is debt that, technically, people no longer legally owe, but debt collectors buy it anyway because it's legal for them to trick former debtors into paying it.

And I see a lot of payday loans going for 2 or 3 percent of principal. We want to under-promise and over-deliver. But we believe—and our industry experts have assured us it’s possible—that we should be able to do the whole thing for under 5 percent of principal.

Fabien: So, that is debt that creditors have little confidence they'll ever be able to call in?

Thomas: No. Actually, that's one of the biggest misconceptions we've seen out there.

People think that this is being sold so cheaply because people have given up collecting on it, but it's exactly the opposite. The banks are actually required by law to charge off defaulted debt after 180 days, meaning that before selling it, they claim it as a loss and receive a tax deduction. So this is like a mini-bailout every time they do it. The government has stepped in and mandated this process so that banks can keep their own balance sheets clean, rather than top-heavy with toxic debt that will inflate their receivables. Every time they charge off this debt, they actually get a tax cut—it's ridiculous. And then those same Wall Street banks lend large amounts of money to the biggest debt buyers so that they can, with lent money, buy all the toxic debt these banks have produced and make a ton of money collecting on it.

After 180 days, when it gets charged off and bought and sold, that's when the collection really starts. And because collectors are buying it for only pennies on the dollar, they only need to collect a small margin above it in order to be massively profitable.

So this debt is definitely collectible, ripe debt. And we're keeping money out of the hands of collection agencies when we abolish it. We're keeping more money in the pockets of people who don't have enough of it. The 26 largest debt buyers in New York City have extracted over a billion dollars of wealth out of the poorest people in New York, over a two-year period, and they did that by systematically breaking the law.

They've privatized the court system to turn the courts into a paper mill that allows them to dock people's wages in order to get paid, without due process. It's a violation of everyone's constitutional rights, the way they're doing it—arranging to dock wages without any sort of trial.

The Neighborhood Economic Development Agency Project, or NEDAP, is a group of lawyers who specialize in debt collection abuses. They’ve filed a class-action lawsuit to try to shut it down. And I hope they succeed, but this is going on other cities as well.

Fabien: Do you feel that Occupy has primed people to take a more empowered approach to these problems?

Thomas: Even within Occupy, I would say people are a little bit too excited about the Rolling Jubilee. They haven't quite glimpsed the way it fits into a debt resistance movement.

The Rolling Jubilee isn't going to solve all of our problems. It's going to be a drop in the bucket, and we need to utilize it to build a movement that really can solve our problems.

But I think Occupy has certainly primed me. Before Occupy, I had never attended a General Assembly. I didn't know about the consensus process. I tried to be a responsible citizen and I showed up to protests, but none of the protests felt like they went beyond the symbolic—you know, shaking your fist at the war.

One thing Strike Debt has that Occupy didn't have, is Occupy Wall Street. We've got a year of people who have been radicalized, who have been trained in direct action, who have gone to jail, many of us, and who have learned to not be so afraid.

And we've met each other. This kind of project wouldn't be possible with just one or two people working on it. It's an amazing network of talent and commitment. I'm continually astounded: when we have a need, somebody just emerges from the woodwork, who says, I've got 20 years of experience doing just that, and I'm willing to dedicate the next five months of my life to doing it for you. It's beautiful—it makes me tear up a little bit. And it's so hyper-organized, it's like a little ant farm.

I think Occupy is the most beautiful thing in the world.

Fabien Tepper wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Fabien is an editorial intern at YES! and blogs at sentientcincinnati.com.



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ABOUT Fabien Tepper

Fabien Tepper wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Fabien is an editorial intern at YES! and blogs atsentientcincinnati.com

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2 comments on "The “People’s Bailout” was Just the Beginning: What’s Next for Strike Debt?"

JS

December 15, 2012 10:20am

Everyone should read Michael Rowbotham's books and also watch the film "Money as Debt" and read the background material (gray box on the website): http://www.moneyasdebt.net/

The issue is not just local pockets of debt, but the fact that the entire monetary system has been designed so the banks have been given the right to create the vast majority of the people's money OUT OF NOTHING, AS DEBT TO THE PEOPLE (where those who need the money must borrow to have it and thereby pledge real assets/collateral in return for something the banks just created by typing numbers in someone's account).

This systematically rigged and unfair system is then exponentially more so internationally, where whole countries are put into debt and forced to pay in currencies (US dollars or IMF ''special drawing rights" or SDRs - a basket of currencies including dollars, euros, pound sterling, yen) that are created by others and that they can only obtain by reorienting their entire society and economy to serve those who CAN manufacture the dollars and SDR currencies. For the international system see Rowbotham's book Goodbye America (for a start!). And for the domestic systems/effects see Rowbotham, The Grip of Death.

And BRAVO to Gokey for starting this vital train of creative thought - perhaps just extend it a bit further to the unjust monetary system as a whole and restore sufficiency of locally (community) created and locally controlled currencies. While National government money should be reduced in importance relative to the local, where it exists it should be created FOR the people, not just in our name as debt to us -- in other words, it should be created not as debt but rather created as positive value to be spent into the economy debt-free to purchase universal health care, universal education, and to ensure that no one goes hungry or homeless.

Gael Gibney

December 14, 2012 11:33am

A word of caution. Banks, corporations, and debt collection agencies can collect as much as they can from a debtor, then send the debtor an IRS Form 1099-C, debt forgiveness form. At that point, the balance of the "noncollectable" debt becomes income to the debtor, and the IRS can get after him.