I. Introduction — 0:00
II. Opening Lead — 3:03
IV. Panelist Responses — 21:59
IV. Questions for Panelists — 40:30
V. Audience Questions —1:05:54
Transcript is below. Some parts are edited for readability, and are not exact transcriptions. Audio does not include audience questions, but they are included in the transcription.
My name is Eli Campbell. I’ve been researching boycotting student loans for the past few years. I’m so excited to have this panel here to talk about this today. I just want to go over briefly the format and then we’ll get into it. I’d like to everyone go around and introduce ourselves, and then I’m going to give an opening lead into the discussion for about 15 minutes, then I’ve got a few questions for the panelists and then we can get into questions from the audience and open the discussion up. Alright, so would you guys go around and wanna introduce yourselves?
My name is Daniella Medina, I’m a visiting Professor of Economics at Marist College, formerly at Bard College, as well as SUNY New Paltz, I have my MS in economic policy & theory from the Levy Economics institute at Bard College. My focus was the econometrics of poverty and inequality research, but mostly I take an intersectional-feminist, Marxist approach to trying to look at households ability to react to economic shocks and of course student debt is obviously at the forefront of this issue. Student debt hinders consumption directly, wealth accumulation, small business formation, household formation in general via reproduction and the viability of homeownership for the current generation, and other generations who are still struggling to pay off their loan debts, um yeah, so I’m excited to be here.
I’m Jill Stein, I’m a medical doctor, I used to practice clinical medicine, and now I practice political medicine, because it’s the mother of all illnesses, and we gotta fix that one if we’re going to fix everything else that’s literally killing us, so I’m interested in how we build the power that we actually have, that the powers that be are trying to talk us out of, how we build coalitions, how we get together as social movements, and how we then assert that power politically, and do both of them, because neither one alone is gonna do it, we’ve got to do both, we’ve got to challenge power, but to do that alone is fruitless. I’m very interested in student debt as a really convergent issue, it’s in many ways sort of the mother of all issues, there’s a moral imperative to fix it, to obliterate it, and there’s a practical imperative, because without the power of our younger generation to drive social change it won’t happen, so that’s why I’m here.
I’m not as impressive as anyone else here, but I’m David Oks, I’m the campaign manager for Mike Gravel’s 2020 Campaign, if you can call it a campaign, and I’m interested in debt generally, as a force, an eternal force, for preserving the status quo, there’s a fantastic book by David Graeber on the history of debt that got me interested in the issue.
Excellent, we’re going to be talking about David Graeber for sure. Alright, can everyone hear everything okay? Ok, so I’ll start off with my lead into the discussion.
II. Opening Lead
Eli: So, for the past few years, I’ve been researching and writing about a hypothetical boycott of student loans. That’s right, steal your education. Why? Why not? It seems that the times we live in are not normal. There is a meme going around lately that says:
As Dr. Martin Luther King Jr. put it, “The world is all messed up. The nation is sick. Trouble is in the land, confusion all around.” Perhaps these times are extraordinary, unique in the whole of human history, but on the other hand, maybe this is the moment in which it is finally possible for the arc of the moral universe to bend enough to reach justice, the present fully connected with its preceding history. It must be that moment, because our survival depends upon it.
On April 3rd, 1968, Dr. King gave his final speech. Among other things, he advised striking sanitation workers in Memphis, Tennessee:“always anchor our external direct action with the power of economic withdrawal”, and the next day he was assassinated. Listening to these words in January 2017, seeking wisdom for troubling times just a few days before Trump’s inauguration, it struck me that this logic could apply to a movement demanding the cancellation of student debt.
I knew that there were corporations making a profit off of student debt. I had seen letters coming for my brother from Navient. What I came to learn is that the student loan industry doesn’t just make money servicing student debt, they are also using it to create speculative financial instruments called Student Loan Asset Backed Securities, or SLABS, which I just find to be a very strange name.
A CitiGroup primer on SLABS from 2002 subtitled “Education — the investment of a lifetime” reports: “The beginning of the student-loan ABS market usually is dated to November 1992 when the SEC adopted Rule 3(a)-7 of the Investment Company Act of 1940.” So there’s a very specific start date for when the banks started gambling with student loans. If you have student debt, your loans may be bundled up into one of these assets. War is peace, freedom is slavery, and debt can be an asset, except of course if you’re a student borrower.
If you go on the website for Navient, or any of the other major servicing companies, and scroll past all the pictures of conspicuously racially diverse groups of people that are smiling too much and convoluted propaganda about how these corporations are really trying to help borrowers, you can find a page titled “For Investors”. Here you will find everything you need to know about the latest offerings of SLABS, and servicing reports of their older SLABS.
Some of you may be reminded of the Mortgage Backed Securities that played a major role in the housing bubble that caused the global financial crisis a decade ago. I am sorry to tell you that the con here is exactly the same, but instead of gambling with people’s homes, they’re gambling with our futures and our right to education.
If you take a pool of tens of thousands of student loans, it is less likely that the whole pool will default than that individual loans will default. Factor in the high interest rates and the fact that since 2005 student debt is almost never dischargeable in bankruptcy (thank you Joe Biden!), and debt becomes an asset. These assets are then sold to investors and traded in secondary markets, with the usual suspects on Wall Street acting as middlemen. Each financial quarter, this industry issues billions of dollars in SLABS.
In the past few years student debt cancellation has gone from being a radical idea to the center of the dialogue. I’m sure many of you saw in the Presidential debates this week that Bernie Sanders proposed his plan to cancel all student debt, private and public. We also have Elizabeth Warren’s plan which cancels less of the debt but is still significant, but the presidential candidates and the media are still not talking about SLABS, and they are not talking about the major conflicts of interest, given the fact that companies like Navient are gambling with student loans while under contract with the Department of Education to service the loans. They’re making a profit off of the government, and off of all of us.
Above all else though, what I’ve learned through this project has convinced me that even if one of these candidates becomes President, Congress or the Department of Education will not cancel student debt until we rise up and demand it, and utilize the power of economic withdrawal to send a message that can’t be ignored.
This project has led me down many different paths of inquiry, but primarily I have concerned myself with studying the tactics of revolutionary movements (especially student movements) and trying to understand the vulnerabilities of the market for SLABS. Could a student debt boycott be an effective strategy for the intersecting movements today demanding a radical transformation of society? And at the root of these issues, what is the student’s debt to society in 2019? When the world is on fire, and they’re telling us to act like everything is fine…
I’ve done my best to find answers to these questions for myself, and I would like to share my conclusions. I’m not an economist, a political scientist, or a historian, and I did borrow $34,000 from the Federal government to get an art degree and I am never going to pay it back, but hear me out, and then we’ll hear this marvelous panel weigh in.
My first conclusion is that it seems that throughout history there is an undeniable connection between education and revolution. Certainly in the 20th century this has often been the case, but even in ancient times, educated people are often at the heart of revolutionary movements. The unique social position of students allows them to take certain risks in challenging the status quo that the working class is generally unwilling or unable to take, for a number of reasons. But once students disrupt business as usual, and find solidarity with the workers, their struggles become connected.
One of the most dramatic examples of this is the infamous May ’68 student uprising in France, just a month after Dr. King was assassinated. In the span of a month, protests over the arrest of 6 students at one university turned into mass student demonstrations, and a nationwide general strike that sent their President into hiding. Couldn’t we use some of that energy in the USA right now?
Another relevant aspect of the social position of students is that the student body is alienated from the workforce, and continually replaced. A manifesto published by the Situationist International which had a great influence on the French Students in 1968 put it this way: “The student leads a double life, poised between his present status and the utterly separate future status into which he will one day be abruptly thrust.” For instance, I did not know, despite having been interested in this issue for years, quite recently I found out that in 2011, before I had ever signed a master promissory note, activists at Occupy Wall Street including NYU professor Andrew Ross had explicitly called for a Pledge of Refusal to repay student debt.
My second major conclusion is that given the dangerous circumstances we find ourselves in, student revolution is actually a necessity to make the changes we need to make happen. Rising fascism, Trump’s concentration camps, police brutality, prison slavery, the sixth mass extinction. I don’t really need to list it all, right? We all see what’s going on. I think it is beyond question that students, and everyone else with them, need to rise up, and not just to support candidates or demand incremental reforms. Jim Morrison said it: “We want the world and we want it Now.” In the past year, students all over the world have begun school striking for climate justice, and the power of economic withdrawal would seem to be a logical next step for this movement, and perhaps a way to connect the struggle of students and graduates who are separated by this double life.
My third conclusion is that, from my own personal experience, the experiences of my peers, and especially learning about the experiences of student revolutionaries in the 60’s, I can only conclude that the primary purpose of student debt is not to make a profit, but to prevent student revolution from happening in the United States. Mario Savio, a student leader in the Berkeley Free Speech Movement in 1964 wrote: “Students are permitted to talk all they want so long as their speech has no consequences.” Like many student activists of his time, he expressed a concern that the university was becoming an institution whose primary objective was to manufacture students as products for government or industry to consume. In the market for SLABS, we have a dark manifestation of those fears, where we are products, assets, and literal streams of income for these investors.
And finally, my last conclusion is that there are significant vulnerabilities in the SLABS market that could be exploited as leverage by an organized movement of student debtors. I base that conclusion on reading the reports and financial information that these companies are required by law to publish when they issue SLABS. Here are some gems from one of Navient’s Prospectus Supplements, under the “risk factors” section. Yknow, risks to the investors, not risks to us pawns in this absurd game they’re playing with our lives.
We cannot give any assurance whether in the future a functioning market for [Student Loan Asset Backed Security] notes may once again disappear and your offered notes may be subject to an ongoing period of failed auctions.
An economic downturn may cause the market for auction rate notes to cease to exist…
Holders of auction rate securities may be unable to sell their securities and may experience a potentially significant loss of market value…
The companies gambling in this secondary market for SLABS have CEOs, boards of directors, shareholders and investors. They have a bottom line, and if a popular political movement threatens their bottom line, it will have an impact. Even if a boycott did not directly cause a collapse in the secondary market for SLABS, symbolic acts of resistance may be what is necessary to finally spark public awareness about what is being done with our debt, ideally before we start voting for anyone in 2020.
The student loan capitalists are expecting us and future classes of students to continue borrowing money and making payments for the rest of our careers, just scraping by so we can pad their portfolios. The final maturity dates of some of these SLABS are as late the 2060’s, 2070’s, even 2080’s. The latest I saw from Navient was 2083! If they think anyone is going to be paying their student loans in 2083, I can’t even speak to that. Even in the face of overwhelming evidence, (even from conservative institutions like the Brookings Institute) that student loan defaults are going to increase greatly in the next few years, they want every last penny before the house of cards comes crashing down. Millennials (and Gen Z, although the media does that thing where they think everyone under the age of 50 is a millennial) are constantly being blamed for ruining “the economy”, we might as well actually do it.
Of course, any movement preparing to do this needs to be ready for lectures on personal responsibility from reactionary liberals and fossilized conservatives, and to them we say: Just in the past two decades, Congress authorized trillions of dollars to be spent on bipartisan wars for oil, bipartisan bailouts for the criminals on Wall Street, while ignoring the climate emergency, even though #ExxonKnew in 1977 that fossil fuels were increasing the temperature of the atmosphere. And now the national debt is approaching $23 trillion — weren’t those our dollars at some point? Who was more fiscally irresponsible: students, or Congress? Instead of funding education and providing for our future security, our representatives cashed checks from the student loan industry and said to hell with the students.
Just a few generations ago there was virtually no such thing as student debt the way it exists today. What has happened in the last 50 years, since Jimi Hendrix played the National Anthem at Woodstock this August? For one thing, Americans started borrowing money for just about everything, and in the Reagan era Wall Street went into overdrive securitizing all that debt, turning our liabilities into financial instruments. This postmodernism has been one of the driving forces of the economy, but really it’s the culprit that has produced the obscene income and wealth inequality that we are seeing today. However, despite the abnormality of the times we live in, this story is the oldest story we know.
Professor David Graeber, an anthropologist who was involved in Occupy Wall Street, wrote a book called Debt: The First 5000 years, which delves deeply into the history of debt and its relationship to our basic morality, told through an examination of different cultures and traditions over time, the cyclical conflicts between creditors and debtors, and the larger cycle of societies moving between credit systems and cash systems. At the end of this incredible book, he calls for one specific thing: bring back some modern form of the Old Testament tradition of the Jubilee year, which is described in Leviticus 25: “Consecrate the fiftieth year and proclaim liberty throughout the land to all its inhabitants. It shall be a jubilee for you.”
Economist and Professor Michael Hudson (who is speaking on another panel at this very moment somewhere at LeftForum) recently published a book called “Forgive Them of Their Debts” on this very subject, in which he lays out the long history of debt cancellations, from Mesopotamia in the third millennium BC, through Biblical times, Greece, Rome, and on to the Middle ages, connecting this history to our modern capitalist era.
What’s interesting is that Martin Luther King in his speech in which he talks about the power of economic withdrawal, actually talks in a very similar way about how he is glad to have been alive in 1968, and if he could talk to God and be alive in any period of time, he says [something like] ‘I wouldn’t want to be alive in the biblical times, in Greece or Rome, I would want to be here right now in this moment, to fight for the moment we’re in’ and through all of these times, Michael Hudson shows that these debt cancellations happened quite consistently throughout history, and up until recently they were a fundamental safety valve preventing the breakdown of social order, when the creditor class drives debtors to despair or revolt. My understanding is that Michael Hudson is not in favor of a student debt boycott last time I talked to him, but one thing he has at various times times argued is that “debts that can’t be paid, won’t be paid.”
Of particular interest to our American culture, regardless of your religious beliefs (and this was a really big surprise to me), Hudson asserts that the central program of Jesus Christ attested to in the New Testament was forgiveness, not of sins, but of literal debts. Hudson writes “Jesus announced in his inaugural sermon that he had come to proclaim the Jubilee Year of the Lord cited by Isaiah, whose scroll he unrolled”:
“The Spirit of the Lord is upon me,
because he has anointed me
to proclaim good news to the poor.
He has sent me to proclaim liberty to the captives
and recovering of sight to the blind,
to set at liberty those who are oppressed,
to proclaim the year of the Lord’s favor.”
Some translations of the Bible use the word “debt” and, some “sin”, but reading the Lord’s Prayer for instance, (Give us this our daily bread, and forgive us of our debts, for we have forgiven our debtors), takes on a new meaning in this context. The tradition of debt cancellation that Jesus references had origins as distant to his era as he was to our time today, but its importance to the present as it was then cannot be understated.
Evidence of this is attested to by Flavius Josephus, a 1st Century CE Jewish historian, who fought in the first Roman-Jewish War and wrote histories of the Jewish People after defecting to the Roman side. Roughly three decades after the historical Jesus is estimated to have lived, the radical Jewish Zealots broke into the Great Temple and according to Josephus…
“carried the fire to the place where the archives were reposited, and made haste to burn the contracts belonging to the creditors, and thereby to dissolve their obligations for paying their debts; and this was done in order to gain the multitude of those who had been debtors, and that they might persuade the poorer sort to join in their insurrection with safety against the more wealthy.”
The irony that we view these ancient civilization as being primitive, when they had regularly confronted the problems between creditors and debtors that are destroying our social order and had a simple solution- just cancel working class debts periodically! But our modern world cannot conceptualize it, because we can’t imagine anything other than late-stage capitalism. The grind to get that daily bread is a matter of life and death, but this is actually somewhat of a modern phenomenon.
David Graeber notes that the first known use of the word “freedom” in a political document is in the first known general debt cancellation, issued in 2402 BC by a Sumerian king. Graeber and Michael Hudson both note that historically the words ‘freedom’ and ‘liberty’ explicitly refer to the rights of debtors, but during the Roman empire this gradually changed to mean freedom for creditors to do whatever they wished with those indebted to them. I think as Americans when we hear Donald Trump talk about freedom and liberty, we are familiar with this definition of those terms.
A few weeks ago I was participating in an action outside Governor Cuomo’s office in Albany demanding the passage of the Climate and Community Protection Act (which is a piece of legislation that we did pass but is somewhat insufficient to actually stop the sixth mass extinction). One of the organizers said something to the effect that “nothing else happening in the capitol building today was as important as passing the CCPA” and while I sort of agreed with that, leaving the capitol building my friends and I encountered a group of NYC Taxi Drivers. They were calling for two specific things: End the silence of Taxi Drivers who have been committing suicide due to financial hardships, and cancel unpayable debts of drivers who have taken out loans to afford their taxi medallions whose values have been destroyed by Uber and Lyft.
Another good tweet going around lately says the following:
A student debt boycott wouldn’t just be about cancelling student debt, but about provoking a confrontation with the creditor class. If student debtors take the lead, perhaps as in France in 1968, the indebted working class will stand in solidarity.
So I put this question before the panelists, the audience, those watching online, to the activists and organizers demanding a radical transformation of this country, and the 44 million student debtors; is it time to organize the power of economic withdrawal, and stop paying our student loans? Thank you.
So I’d like to give all the panelists some time to respond, then I have questions, and then we’ll start taking your questions.
III. Panelist Responses and Questions
I wanted to start by talking about how- I mean you’re recounting the history of debt, thinking about how the broader issue here is systematic. We have an unrestrained financial sector. We have completely unrestrained financial innovation, we’re seeing all these new assets pop up, pretty much out of thin air. They have these mathematical justifications that are not accessible to us, we can’t necessarily understand them- the process by which they create these assets is completely esoteric.
So we see this extension of this debt anchoring credit availability over time, right? And we can imagine that over time household consumption will be increasingly, more and more funded by debt overall, which seems like we could head towards this dystopian future of complete debt servitude. I’ve noticed a lot of similarities, and also some differences between the mortgage crisis and also what could be an impending student debt crisis.
With Mortgage-Backed Securities, the asset that they’re based on is housing, right? The actual mortgage debt accumulated. So as we’re seeing housing prices rise over time, we see the value of Mortgage-Backed Securities rise over time. There’s this collateralization process where they’re combining all these Mortgage-Backed securities into one specific security where they’re broken up into specific tranches, over time we’ve seen another market evolve there, we have people gambling on that debt, and that’s something that of course we see happening.
We can’t necessarily get access to the data that breaks down what’s called Credit Default Swaps (CDS) and Collateralized Debt Obligations (CDO), which is kind of like a third market for these things where honestly investors are gambling on our likelihood of default, and they’re kind of hoping that we default to some extent, right? That’s the payout, the volatility is the payout.
I’ve studied in the Minsky school of thought, which is very focused on something called money manager capitalism, where we’re seeing the formation of an asset price bubble. When Mortgage-Backed Securities formed an asset price bubble, we saw the value of that asset rise over time, we couldn’t tell how much of that asset price value was rising due to speculation, or just due to the productive value of that asset.
The reason is we don’t actually have indicators for asset price inflation. We don’t actually know what’s causing the price of assets to rise. So when housing prices went up, we saw all these investors (through leverage) increasing their debts, invest that debt into purchasing Mortgage-Backed Securities, and at a certain point housing prices started to fall, so the MBS also started to fall, they started to tank.
We saw the US Debt/GDP ratio go from 60% to 110%, and this was a global crisis, so we saw Europe go from 40% Debt/GDP to 90%. All economists agree that if we saw another asset price bubble, we would not be able to escape a depression. We were able to, through expansionary monetary policy, increasing our money supply, we were able to put some of that debt on the Central Bank’s balance sheets. They hold, initially it was 800 billion worth of MBS, over time it has decreased in value to 400 billion, and that’s on the Central Bank’s balance sheets to try to take risk out of the financial sector.
If we’re willing to bail out the banks, we’re willing to bail out these banks out who made these investments, not out of necessity, not out of some social investment- because it’s socially imposed on us that we know we can’t enter the labor market with full faith that we will survive if we don’t get an education. You know, the idea of market citizenship, having a house means so so much, we’re kind of manipulated into these investments, we don’t necessarily have the degree of choice that we’re told that we have. I could honestly keep going but I’m gonna stop here.
So, I’m gonna speak from the non-economist’s perspective, and just to make the point that when people when were being thrown out of their homes, or they were being tricked into signing mortgages where they didn’t understand the legalese and the fine print, they didn’t have to understand how they were getting screwed by this economic system.
I think it’s really helpful to separate this obscure, really complicated PHD level economics from the social reality. It’s really important to have those arguments down, and they need to be made accessible to people who can use them, but the real fight (and I mean a non-violent fight), but the real resistance out in the street doesn’t depend on that at all. The millions of people who were cheated out of their homes, that experienced the outrage around that, and didn’t need to be explained how it worked. They knew that the economy was rigged, they’re being ripped off. Mortgage loans were one of the ways they were being ripped off, but the whole system is, what shall we say, rigged against everyday working people, and that’s not okay.
I’d say another general principle of movement-building is to sort of define things in a way that makes them as big as possible, and that helps as many people as possible to get together. When it comes to pursuing a student boycott against loans, the stumbling block is always, well are we going to tell young people holding those loans to default and to carry that black mark on your credit and to have your wages garnished and your social security garnished and the incredible abuse that will be poured down on you? Now that said, 20% of student loan holders are already in default, and according to the statistic, 2/3rd are somewhere on the road to default, their loans are delinquent, or they’re in deferral or forbearance or one of these other fancy names of categories that means you’re struggling. So ⅔ of people who own student debt are struggling. Why?
Because we have an incredibly outrageous, unfair, rigged economy, which is not working for everyday working people, especially marginalized communities, women and people of color are being screwed more than anybody else on this. I feel for me, it’s not my place to tell anybody to be the sacrificial lamb, and it’s hard to sell a movement that requires people to self-sacrifice, but I think there’s another way to harness the movement, I think the imperative is to build that movement.
Exactly how that movement should be built I think is a subject for discussion, but the facts of Student Loan Asset-Backed Securities, those facts are extremely outrageous. They add fuel to the fire when you come to see how much everyday people are being abused by this system. So it’s great to have all the research that you’ve done, and the history of this, it’s really fabulous, at the same time I think most people are going to be out there fighting not because they understand that level, and they don’t need to, but it gives them another assurance, another sense of confidence that your outrage is more than justified, as if you needed it to be justified.
So it’s really important that the student loan resistance movement, however it comes to be defined, it really needs to work in concert, and there are many ways to assert the power of economic withdrawal- we don’t have to create sacrificial lambs out of people who are holding student debt, there are all kinds of ways we can stop the wheels of economic and ecological destruction, and those wheels are turning, and whether its our predatory healthcare system, again it’s leaving behind about 45 million people who either lack health coverage altogether, or they have inadequate healthcare coverage and they can’t really afford to use it. It’s a huge portion of people.
The numbers of people in poverty are huge, it’s said that 1 out of every 2 Americans is in or near poverty, and the recovery continues to go to the top. A few years ago it was 68 billionaires who held the wealth of 50% of America, that 68 billionaires- it no longer takes 68, it’s now 3 billionaires, because they’re getting richer and everyone else is getting poorer. It’s off the charts. It’s absolutely jaw-dropping what a deadly, rigged economy we’re in, as our democracy is being unraveled.
I have to say a quick word about the war machine, because this is where our money is going. 60% of the discretionary budget and more is going into fighting these absolutely catastrophic wars that are not just unproductive they’re counterproductive. They make us less secure, they bankrupt us at home, they extract our resources from the things that we need, and I think Student loan debt is key here, because it does keep people out of contention. It removes people, it puts them into those 3 jobs that they’ve gotta be working around the clock, it completely removes them from political action, so that power of youth movements is huge.
Whether you’re looking at the civil rights movement, and the role of young people of actually pushing forward the initial boycotts that really triggered the civil rights fights of 50’s and 60’s, or the anti-war movement that brought the troops home from Vietnam, the women’s movement, young people have always been at the forefront, and without that it just doesn’t happen. So for all those reasons it’s really important that we work together, and I think young people are at the forefront of the climate movement too. Working with Extinction Rebellion, as well as with the school strikes movement, and working with the immigrant’s rights movement, and the anti-deportation movement, as well as the Black Lives Matter movement, and the anti-police violence movement, these movements are all fundamentally led by young people, and everyone is carrying all those burdens.
It’s not like we survive with one organ system. In training for medicine you get sort of nudged into one corner or the other, as if you could live by your heart alone, or your brain alone- we’re whole people, and we need more than one thing, we need all those critical life support systems to be working for us, education is one of them, and that’s where I’d love to see us go with this, how do we help bring this movement together, and in my experience people out there in the movements now really get it, they really get that the clock is ticking, whether you’re looking at the economic crash, or the nuclear weapons confrontation/conflagration, or endless wars, or the climate, we’re all on a countdown. It makes it really critical that we get together and we start working in a convergent way.
If we simply aligned our calendars and we all agreed to strike, in our own ways, whatever they are, and we can make our own decisions, we can present people with a variety of options, and I must add the labor movement of course, because the teachers have really demonstrated the power of the strike right now, they’ve sort of revived it after decades in which it was dormant, and that’s a strike taking place really without the blessings of our political establishment or even established union leadership. There’s grassroots uprising that’s taking place right now, and if we can align our calendars so that we’ve got the same strike going on, and develop in our communities the ability to support those strikes, then we’re talking about bringing the wheels of economic and ecological destruction to a grinding halt, and that will be a real game-changer.
It strikes me that, especially in the United States, (less so in Europe but also in Europe), if you look at the facts of the lives of those who are deeply in debt, not only student debt but also medical debt, unrelated debt, you see significantly higher rates of divorce, higher rates of childlessness, higher rates of suicide even, and you wonder, and you compare that to people who are objectively in a similar economic situation without that debt, (people who have similar net-worths but who don’t have to deal with debt) and you find that those people are usually much happier, much more contented, they have better family lives, and it goes to the fact that I think the fundamental struggle beneath economics, beneath politics, you need a revolution in public ethics, in how people conceptualize morally the situation that they’re in.
We live in a world where being in debt is seen as being in a state of extreme moral parlousness. In German the word for ‘debt’ come directly from the word for guilt. The first thing you have to do in my view, is you have to convince a lot of these people who think that they’re lazy or entitled or they made a huge mistake- that they were the ones who were wronged, that their misconduct is not a real thing, and that the real malefactors are institutions like the universities, like the student debt companies, like the federal government, that have for decades profited off student debt.
You have to tell people, and this is very difficult thing because these are people who have been trained their entire life that they’re doing the wrong thing, you have to tell people “you’re correct, you’re doing the right thing”, and it’s a very a difficult struggle, but you have plenty of people who suffer a distinct non-freedom, not only because of their economic situation, but because of a sense of guilt imposed by society. When you rectify that non-freedom, then you open them up to political action. I’m reminded of a plan that was released a few weeks ago by Congressman Moulton of Massachusetts that proposed that “we will forgive student debt of those who go and serve in the military”. And basically, what such a plan is saying, is- you’re lazy and you’re entitled, and you did the wrong thing, but you volunteer to be cannon fodder and maybe you die, then you’ve rectified the wrong that you’ve done.
Then you have no student debt.
I think that’s such an amazing point because what joins all of our intersecting issues is that this idea is imposed on us, that we should take responsibility for systematic failures, that it’s our personal failing when we don’t measure up to those idealized successes are promoted to us all the time, I mean we see it in environmental change- “stop using straws” when the majority of plastic waste is from production… whatever, just an example.
It strikes me that the fundamental question is an ethical one- any movement for a student debt boycott or mass action to relieve student debt, and thank you for bringing in the student debt jubilee, which is an idea I’m a big fan of, the first thing you have to do is tell people “You did nothing wrong. Institutions are the ones who did something wrong.”
III. Questions for the Panelists
Alright, so I’ve got some questions for the panelists, and then we can take questions from you guys. Dr Stein, I’ll start with you.
In 2016, you were the only presidential candidate who ran on a policy of cancelling student debt as part of a Green New Deal, and three years later obviously this debate has gone a long way. I really just love that I have you and David here, because of what David is doing right now- sometimes you don’t always run to win, you run to move the conversation, and in moving the conversation forward, how can we not be distracted by the Democratic primary in a sense, we’ve got these debates where we have ten candidates on the stage, and the moderator’s mics are going, and nothing is really getting done by the political mainstream, how do we keep moving the conversation forward, outside of this process that we see is fairly dysfunctional? Even if you want to participate in it, we all know it’s somewhat dysfunctional.
I’d say remember here that the facts here speak volumes. The largest voting block right now is 100 million people, largely black, brown, millennial and poor, who are not voting. That’s the largest voting block, it’s almost twice as large as the Democratic and Republican constituents. So most people are not buying this charade, and I find especially this time, when the memory of 2016 and the sabotage of Bernie Sanders’ campaign is so fresh in everyone’s mind, that even more people are not buying it, and the supposed reforms that were going to happen in the DNC, that corporate money was going to come out but then somehow got back in, and then maybe it’s out and maybe it’s in, and you’re not supposed to be following what’s happening with corporate money, but it’s very clear that money is there. There was more Wall St. money behind the Democrats in 2018 than ever in history. Money is not shrinking here. It’s growing, it’s big money, it’s not small contributor money. Big money is bigger than ever.
The reforms that were going to take the superdelegates out have somehow magically become irrelevant. I don’t know if you’ve followed that, but the superdelegates were a major part of the program for how the Democratic nomination got stolen from Bernie Sanders, the superdelegates are basically insider-appointments, they’re not elected, they were supposed to be removed, that was going to be the big reform. Well what happened was that those superdelegates got removed until it came to the second vote at the DNC, but now you’ve got enough candidates in the mix (and how did that happen?) but somehow, you have enough candidates that there’s no way this will be decided in the first election. No one candidate is going to have the majority.
We’re right back where we were before. We had the leaked emails last time that told us about the “Pied Piper” candidates, that the Clinton campaign was encouraging in order to bring out the worst of the Republicans that they thought would be easiest to beat but that was Donald Trump, and so on. The collusion with the media, as well as the financial arrangements that allowed the Clinton campaign to basically be in charge of how the DNC was spending its money. It’s clear that, if we’re not getting Joe Biden, we’re getting a Hillary 2.0 in one way or another. The progressive candidates are going to be played off of each other.
I think it’s really important to keep your brain working, don’t go to sleep, don’t let them intimidate you, there’s a lot of shaming and blaming going on right now, the whole Russiagate conspiracy theory- not that Russians weren’t trying to interfere. We try to interfere, everyone’s trying to interfere, let’s get real about it. And a hundred thousand dollars of Russian Internet Research Agency Facebook ads, a hundred thousand dollars? How did that compare to 6 billion dollars worth of free prime time TV given to Donald Trump?
All of these little scenarios have been created in order, first, to warmonger and create a new Cold War, which is great for distracting us from the economic war on working people and black and brown people here and around the world. It’s also great for silencing the press, which is being intimidated right now, and you’ve got the corporatization of the press, and Russiagate sort of plays into that but especially it vilifies political opposition. It’s been an effort to really smear and tarnish political opposition as ‘Putin puppets’.
It’s really important to not let that stop, intimidate or silence you. Remember, we have the majority, we also have the moral high ground. We have 100 million people who are voting with their feet, that the corporate political choices being stuffed down their throats are not acceptable. Number one do not get distracted by the token measures to acknowledge student debt. I think it’s important to stay tuned to what is happening but don’t buy it. Don’t be lulled into sleepwalking into this next election. And don’t be lulled into forgetting about building political resistance, as Frederick Douglass said: Power concedes nothing without a demand. That demand has to be there in the political realm, as well.
Just witness the fact that we weren’t allowed into the debates even though 70% of Americans were screaming for opening up the debates so it wouldn’t just be the Coke and Pepsi talking heads. They were denied that. most people really wanted an open debate, and 60% of Americans in fact are calling for another new independent party. If you actually look at the numbers, people are screaming for other options, for more voices and more choices.
The last thing I want to say here is, tune into ranked-choice voting. Ranked-choice voting is a voting reform that removes the fear, the fearmongering, the blaming and the shaming. It makes the concept of a spoiled election or stolen votes absolutely impossible. It lets you rank your choices for President or Governor or Senator, whatever. If your first choice for President is an underdog and it loses, your vote is automatically reassigned to your second choice, so you’re never inadvertently helping someone else. Thereby, you can’t be vilified for holding an alternative point of view. Ranked-choice voting is passing against the work of the dominant political parties, it’s passing largely by voter referendum. It’s really important for unleashing more voices and more choices so we can have real debates, so we can have real discussions, not about the horse race or who should get out of the race because they don’t deserve to be in it- that’s all distraction.
We deserve to be discussing our real options, that we’re being screwed economically, that we’re being deprived of a climate future, that we can’t afford our healthcare, that our resources are being stolen in to these predatory wars. This is outrageous what’s being perpetrated against us, and we must not allow ourselves to be silenced, or to be forced into this kind of engineered agreement where we sort of fade from the scene. We need to take ownership of our democracy and our electoral process.
Great, thank you. Going off one of the things you said before about the sacrificial lamb aspect of a student debt boycott- obviously there are huge risks in choosing not to pay your student debt- as we’ve also been talking about, there are a huge number of people who are basically already not paying it off, or they’re making a payment but they’re only hitting the interest and they’ll never touch that principal for the rest of their lives unless they win the lottery.
And talking about the fact that the majority of Americans are disenfranchised from the political process- my argument is that, there will come a time when the disenfranchised people- the 44 people who have student debt who are in that larger coalition of people who are disenfranchised, who know the system is screwing them, and they want a change- I think at a certain point given the crises we’re in, that will become more appealing and people might be more willing to say, okay, if we’re all going to stop paying, I’ll throw my towel in. (My towel in? whatever…)
Greta Thunberg has called for a #GeneralStrike on the 27th of September, to coincide with the UN assembly on emergency climate action in NYC, and Greta Thunberg is calling for a General Strike. I’ve thought particularly that would be a good time.
I have a question for you, David. First, could you talk about what you’re doing with the Mike Gravel campaign.
So Senator Mike Gravel with whom some of you might be familiar, former senator from Alaska, famous for reading the Pentagon Papers, formerly a candidate for president in 2008, now he’s fully retired but basically we’re running a campaign, he’s not running to win, he’s 89 (he’s a bit old to actually serve as president both in our view and in his) but we’re running a campaign to get his views out there, hopefully to qualify him for the Democratic Debates in July, possibly in September, so that he can critique a lot of the establishment candidates like Joe Biden, and also to put forth a radical critique of American Empire, of the broken economy as a whole. Right now we’re right about 10,000 donors away from the threshold.
Great. I have thought your campaign is so remarkable because- and the senator may be a little too old, and the media has noted that a lot of you guys that are running the campaign are a bit young. I read into your background- you ran for Mayor in Ardsley, NY when you were seventeen?
Sixteen! Too young to vote, but he ran for Mayor, because he knew he could shift the conversation even though they were possibly going to legally disqualify him. I think that is really remarkable, and the fact that you have utilized this tactic to have this octogenarian old badass get Gen Z’s voice into the presidential debates, I think the generational dynamic there is very interesting, but I also think that especially with student debt- we’ve seen with Gen Z, the reaction to the parkland shooting, and the reaction to the climate crisis, that younger people are- it is kind of unique that high schoolers have been leading a lot of the emergent social movements of the last few years, I think in the 60’s this was not necessarily the case it was more college students. But now you have very young people that are calling for more militant action- how do you think that Generation Z will feel when they graduate from College? Do you think that they’ll consider a boycott of student debt more than say millennials have or Gen X or Boomers?
Absolutely, I think that Generation Z, and I think some of the younger millennials, but especially Generation Z, they’ve grown up in a world where every system is broken, they were young when the financial crisis hit, they saw the disaster that was the invasion of Iraq and the invasion of Afghanistan, they’ve never known a country where things seem to be working properly like of lot millennials did, like a lot of Generation X did, and so they know more than any other generation that some sort of radical change, some sort of revolutionary change is imminent and is necessary, and that’s why so many of them are supporting candidates like Bernie Sanders, because they know that the system as it is cannot survive, and should not survive for a long time.
You see that with the climate crisis, you see that with the poverty that is so common in this country, and so I think that Generation Z, whatever you want to call them, some people call them Zoomers now, they as a generation would be extremely receptive to mass action. That’s why so many of them are embracing mass action independent of government, that calls for abrupt and radical changes to the economic structure of this country.
Great, Daniella, can you talk about how this socially unproductive industry of not only lending to students but also securitizing student debt, turning it into financial instruments, all without… I mean, you sign the paper on your master promissory note that says something to the effect of “you agree to pay all reasonable, (it uses the word reasonable!) fees and fines that may be incurred while servicing your debt.” Do you think in your perspective as an economist that it is reasonable to have 17 year olds or high schoolers take out these massive loans and then have them be gambled on by the financial services industry?
Absolutely not, especially with the existing information asymmetries, knowing that we don’t have access to the information that would allow us to gamble on these debts, but somebody else is able to, in a closed room with a bunch of other investors gamble on our debt, and I think it’s really important, this comes from my studies, but I can try to explain in it a clear way, these types of securities are completely socially unproductive. A lot of the things that are gambled on in the financial sector nowadays are socially unproductive.
When we invest in our education, we’re assuming that investment for us, is productive in the sense that we’re enhancing our human capital, which means that our labor is valued more highly when we go into the work force. Unfortunately, wages adjusted for inflation have remained stagnant for the last 30-ish years as the same time as productivity going up rampantly, so we’re working harder, we’re getting paid pretty much the same as we were in the 80’s, right? At the same time tuition has risen, I don’t know, I think Bloomberg News said 175% since… I’m sorry, I can’t remember the exact date, but not so long ago.
These investments based on our debts, just that we’re incurring just to participate fully in this economy, just to survive in this economy, are socially unproductive, because what is the incentive behind this investment? Minski would say, based on his theory called the Financial Instability Hypothesis: plain and simple, stability breeds instability. The only reason stability breeds instability is because in periods when the economy is doing great, investors get frustrated because they can’t find risky-enough investments to give them the reward that they’re seeking. So what have they been doing?
Unfortunately, and I think that the Central Bank is very well aware of this, there are all these loopholes in financial regulation, there are these loopholes that allow them through technology, through financial technology, for these new investments to seep in. Because of the fact that they’re through technological innovation, existing regulations just can’t cover them. They’re able to create these new opportunities to take on more risk, at our expense, all while gambling with our debts.
David Harvey, (who is also here at LeftForum giving a talk here right now), talks about the process of accumulation by dispossession. What that means is we put in the initial capital through our consumption, through our investments in our own skills and everything like that, and they take that money, and even through our investments in housing, they take that initial capital and gamble on the value that we’re trying to create, and take for ourselves, and gamble on it and it and our able to accumulate a lot more money on our debt, on our struggle.
And I just wanna make a quick note about the intersectional considerations here, because there are income and wealth effects associated with student loan debt, meaning on a short term basis when you’re trying to consume you’re overburdened with that payment, and on a long term basis you’re burdened by that stock of debt you’ve gotta pay off over time. If the wealth gaps exist most along racial lines, gendered lines, and especially at the intersection of racial and gendered lines, the people who are the most burdened by debt are women of color, people of color, all across the country, so this is an issue of race, an issue of gender, and I wanted to make sure we’re clear that this is an intersectional issue.
That’s great, and I think having thought about this, the question of refusing to pay your student loans as an act of political protest, naturally does come with its risks, but I think there is a significant and, with the Vietnam war era we saw people who had positions of privilege, like students, saying ‘Hell no, we won’t go’, we’re not gonna participate in this war that is killing people that are not so different from us, except for the fact that they live in a country that is not at the center of US hegemony, they’re not benefiting from US Imperialism the way we are, and we see our connection with that, so we want to… I had a conversation with an older socialist comrade many years ago about [how] he was burning his draft card, he and his friends… he emphasized it didn’t us from being drafted. But we did it as an act of resistance.
I wanna ask, if there was a movement of people demanding that student debt be cancelled, and provoking a confrontation with the financial services- not if everyone, but if a portion of student borrowers, specifically people with privileges, who aren’t at [those] intersections necessarily, if they said we’re not going to pay, and they said that to these industry, and made their statement in a way that was picked up by the media and provocative, how do you think the financial services industry would react? And what is the threat to their bottom line here, specifically?
They’re relying on our debt servitude to have something to gamble on to begin with. As a Marxist, we’re always looking for the basis for class-consciousness, the basis here would be our joined struggle and strife being burdened by debt, and the student class of people burdened by debt is a large population, and it spans a bunch of different intersectional spaces, which would allow to align on a unified front, and be able to amass the collective bargaining power to use it against the formal market, to use it against the financial sector.
I think it’s so ridiculous, I want to add, that the Central Bank was so willing to bail out the banks, and get creative to try to remove all that risk from the financial sector by acquiring all of those securities, right? Why can’t they get creative with households? Isn’t the real sector more dependent on our consumption and our complicity, than it is on the leveraged financing of the financial sector? They can’t do anything if they don’t have our capital to start with?
So I think we can move on to questions if you guys wanna open it up?
V. Audience Questions
Note: Audience questions were hard somewhat inaudible. I rly tried fam. -Eli
I just want to point out the intersection between the student loan issue and the healthcare issue, and education, If I’m not mistaken Dr. Stein we have 16,000 M.D’s go into the market every year, and we need more, and that‘s part of the problem it’s a bottleneck. And you’ve got people who have been turned away from medical school with a huge amount of debt. At the same that 20% of GDP is spent on healthcare because it’s so expensive because we don’t have enough doctors. Talk about finding a basis for this, we can extend it to a lot more people.
That’s a really good point, and just to add to that, the biggest driver of bankruptcy is actually people who have gone into medical debt and the majority have health insurance. What does that tell you about how these issues are connected, and how the insurance is really another predatory exercise of the financial services industry? Yeah, we are being screwed on so many fronts, it’s a perfect storm for coalition-building and getting us all out there together and aligning our calendars, asserting all of these issues and really demanding substantive change. Because health and climate and the economy and education are fundamentally one, the Green New Deal is actually a detailed plan that addresses all of these things. I could easily see, and in fact on many fronts I find these conversations are just coming up, sort of bubbling to the surface already. How can we start working together at the community level, and also at higher levels, but starting at the communities, bringing these groups together. Perhaps for emergency response networks or for strikes or boycotts or demonstrations or supporting workers who are going on strike, supporting immigrant groups at risk when ICE is going to be coming into your community. There are so many emergencies that are hitting our communities right now. It’s a great place to start locally, building these alliances, beginning larger discussions at the regional and national levels about how we can bring these networks together.
I thank all the panelists, I think the issues you’re addressing are very important, they’re really at the forefront. Given this… realpolitik *inaudible*, you want to take on student loans, but that is a component of a much larger system that makes right for a very small percentile of the population. You used the Vietnam analogy. If this component of this financial usury system were to be toppled, the theory against going into Vietnam was the Domino Theory. Would the ruling elites not view this as their Vietnam?
The way I would conceptualize a student loan boycott would be a sufficient number of people agreeing if say 400,000 of us sign up to boycott student loans by June 1st, 2022 or whatever, then we’ll go through with it if we reach a sufficient number. If you have enough people to really hurt a student loan company, or a debt servicing company, or any of these institutions that profit off of it, the logical consequence if you win, of course that they’ll do anything to stop you, if you win every single predatory and parasitic industry, those that profit off medical debt, off mortgages, stuff like that, all of them will be threatened. If you win on student debt, then it’s overwhelmingly likely that you’re going to win on medical debt as well. The model will be established for how you organize independently of any major powerful institutions in this country, how you organize the people to cast off the bonds of debt.
This all ties into the overarching issue of debt bondage, debt slavery, debt servitude. Again, I feel like it is possible, just given the extension of regular credit availability- personal loans and credit card debt, at the same time as people being overwhelmed by medical debt literally just to survive. We shouldn’t be going into debt to maintain a livelihood, we shouldn’t be going into debt to survive. All while people are acquiring a ton of debt to use it as leverage to invest in stuff that really has no material effect on their circumstances.
I want to back that up to say, why should getting educated require that you go into lifelong debt, in a way that’s unpayable? I mean, what an absolutely absurd way to define education. I wanted to get back to one of the original ideas we put out, which is that there’s a moral imperative here. That imperative, at least as it comes up in my mind, is that adult generation, the parenting generation, one generation doesn’t create another generation in order to exploit it, and devour it. Now we have a generation that’s being used as a cash cow for the One Percenters in the older generation. No society ever survives by devouring its children, and that’s kind of what’s happening here.
One other analogy I have found very powerful is that you don’t take your kids to the ocean and throw them in and say “learn how to swim!” Education is what we do, it is a life support skill. You have to teach your kids how to swim, if they’re going to be in the ocean. You have to teach them the skills they need to survive in an economy. For a long time throughout the 20th century and before, we provided a high school education for free, because it was an essential skill. In today’s economy, you need post-highschool higher education in order to survive in the economy, so this is not a subject for debate. This is plain, rock-bottom, solid human values. We need to be providing high quality education through college and graduate school. Period.
I’d just like to add, on the issue of debt bondage, one of the many things I read about in this investigation of the history of all this, is that the Roman Empire (it might have been before became a formal empire) they fought several very bloody wars, for hundreds of years, over the issue of debt bondage. And the solution came from the secessio plebis. You had the Patrician class, who were the wealthy landowners and political elite, and you had the plebeians who were the vast majority- the secessio plebis was basically a general strike where the Roman plebeians would just walk out of the city, camp out in the wilderness and the rich people were starving. They fought hundreds of years, and the end result was that they banned Nexum- which was the debt contract/debt bondage system they had.
About the issue of asking people to sacrifice, risk is involved in this, so I study social movements, and one of the things you have come across, is that the barriers to mobilizing people isn’t necessarily having them on your side and agreeing that student debt is wrong, it’s that because there’s risk involved most people won’t take the risk unless they know they’re going to win, so having small victories is really important. I’m curious what you think about potential targets for smaller victories?
I couldn’t support this idea more, I think it’s a good idea, I think it’s one of the most severe problems in our society, and I want your reaction, it’s important to frame it in. They always say it’s student debt crisis. It’s a crisis of education, it’s a failure of education. I can see it as a general strike, I can also see it against various institutions. If you have student debt, you go to Harvard, or you go to City College, or wherever you go, and then your debt is handed off to some faceless investor, but your relationship is with that institution.
Some of these institutions are so pernicious- higher education is just as pernicious as any corporation. Where I live, Northwestern University has an endowment of $10.7 billion dollars. Why should anyone go to Northwestern University and can’t find a job? I think that’s another way to do the strike, we’re striking against this institution. One last thing, people who have a history of oppression- indigenous people and the descendant of slaves- this should be a form of reparations. They should be suing, and they should sue if they get sued.
There are certain for-profit colleges that shuttered their doors, and left people with student debt, degrees that were useless, no jobs, and there were some financial strikes where student debtors did refuse to repay their loans because they really couldn’t. I think in some of those instances, whatever case was made out of it, they ruled in the favor of the students. I think in some of these cases we’ve seen Betsy DeVos’ department of Education reversed some of those decisions, and with Public Student Loan Forgiveness programs, we’ve had 98% of people who applied for it and paid for 10 years are just finding out “Well, you don’t get your loans forgiven, just because!”.
So that’s one example. There have been successful student debt strikes on sort of an individual institutional basis, but I don’t think that’s very well known and it it has to be more well known before anything else will happen.
There is this example of the Corinthian Fifteen, students at Corinthian Colleges which was this chain of for-profit colleges who refused to pay. I absolutely agree that before we start the mass movement we have to prove that you can win, so what I would suggest is, of course the student loan industry is dominated by a few major players, but if you pick off a smaller one that could be damaged by a relatively small action. You organize on that level and you win in some way, or you find some agreement and you defeat them, that would send a huge shockwave throughout the entire industry, throughout the entire country, that mass action can triumph, and you use that model, replicate it in order to take on a larger player.
One other thought there- it’s really a Catch-22. It’s really hard to get a loan forgiven until you have numbers. One approach to that is something along the lines of what you were suggesting earlier. You could have something like a petition, where… I could see it easily going viral. A petition that just states that student loans are unacceptable, and that we intend to resist them, and we encourage to sign up here in order to network for further action, and we call on Navient, or whoever. You could target one of them or maybe many of them to say “we will be anticipating mass action in January of 2020, or whatever” in the absence of taking specific action. It could even be a call to sit down and negotiate. You could get millions signing on, demanding that they negotiate, and at that point you haven’t actually incurred the risk, but you may be able to assert the power of the numbers.
It would be hard to be number 8, or number 25 to sign, but when you’re number twenty thousand…
I think there’s the potential here to amass a movement around this inter-generational empathy, that for all these specific types of debts that are incurred for survival, subsistence, for livelihood, right? That could be the basis here for establishing a broader class consciousness. We’ve got majority Boomers with mortgage debt, we’ve got the general population with medical debt, especially the poor. We have students with student loan debt, if we can join on our mutual debt bondage. If we started with student loan debt we could go really far, and leverage our own debts against the financial sector that forced us to incur them to survive.
I loved what you said Dr. Stein, my view isn’t that education shouldn’t be, may and maybe it was reasoned that way with a high school education at the time, but my view is that education is to better ourselves, and similarly, we’re talking about, why should that be punished, basically, and it’s punished proportionately! If you keep going, you’re further punished. Also, going off what this guy is talking about, it’s the insitutions. It’s between you and the institutions, and I’ve started looking at the board of regents, which the governor appoints, etc. and I think the best symbol (and we need a smybol to go against) is against these instituions. I heard you talking about September 27th, and that’s a symbolic time, but yeah, it could be directed against these institutions, because there’s a lot of people upset with them.
One thing that I found when I was examining these SLABS, some of the documents give information about where the borrowers are located in each asset. A large proportion of the borrowers in the Assets I was looking at were either in California or NY- the UC system and the SUNY system. We have these large public university systems, the largest in the country, are actually holding probably a majority of the debt involved in these assets, but each asset is split up so they have people from every state. It makes it sort of impossible to… Dr. King cites this in his I’ve Been to the Mountain speech, he says “WHen Pharaoh wanted to keep the people apart, he kept the slaves fighting among themselves”. They have us separated within these assets so that we can’t communicate… You can’t organize a boycott of a SLABS, because we’re all over the place.
I think it’s a really important point that you were making before about targeting the institutions. For instance, the SUNY system, the Governor meets directly with the Board of Trustees of the SUNY system, and there is definitely a direct connection there to the state government. I think that’s worth consideration.
Question: Dr. Stein, you said something really that struck me and I’ve been thinking about it this entire conversation, and it’s that people know that they’re getting screwed, I know that I’m getting screwed, but I don’t actually know what that means. And I spoke to you [Eli] about this a few weeks ago, when you were telling me about preparation for this panel… so I’m an actor, I work for a non-profit organization, I have no economics background whatsoever, and so a lot of this is confusing to me. Even this very panel, I’m trying to scribble in my little notebook I bought for three dollars yesterday, to try and understand all of this, to be able to digest it, I want to take part, desperately, in something to make a change. I am feverish at the notion that we’re continuing to drive ourselves into the ground, and it’s scary, it makes my palms sweat, it makes my face flushed, and I don’t know how to do it.
And I think that’s because I don’t understand this notion that we are getting screwed. How do we, take all of this information that everyone has been talking about, and what you’ve speaking about today, and make it marketable, so that people really understand what it means to be getting screwed in this situation. I literally just paid one of my last student loan payments, as this was happening. I had to remove myself, I was on Nelnet.com just now… I was reading all of these words, and I thought “I have no idea what any of this means”… I took the training, but… what the fuck does this mean? How am I supposed to connect the dots?
Question: So I wanted to build off what he said. Who are you targeting? Who do you want to respond to you and take action? So if it’s the financial companies, you’re saying you’re not going to pay the loans unless they forgive the debt? For them, for their bottom line, they might as well not forgive the debt. So my question is, who do you want to act and how is your action hurting them? Who are you talking with your action?
How are getting screwed and, how do we communicate that to people. In researching these SLABS, [I’ve found that they are] so convoluted. One of the things that Professor Richard Wolff always says that I love and has been inspirational to me, is that this stuff isn’t complicated- they want you to think that it’s complicated so that you don’t find out how you’re getting screwed. I think it’s really crucial for people to understand it’s not just that they’re lending us this money we can’t pay back, and they’re servicing it and the interest rates are high, it’s also that they’re using it in this absurd, malicious way- but how do we communicate that in a way that’s presentable?
One idea that Daniella and I were discussing was a video where we were going to be sitting at a table, and I was going to say “Daniella, I came up with this idea for how to pay off my student loans. I’m going to buy some Student Loan Asset Backed Securities, and yknow, I’m not going to pay my loans for 50 years, and then in 2060, when those SLABS are finally at their maturity date, I’ll pay them off with all that money I earned”… That’s neither here nor there.
It’s a convoluted sketch, obviously.
That is the absurdity of it. We are getting screwed, and I think a lot of us do know we’re getting screwed, but we don’t even understand how monumentally we are getting screwed… I just wanted to put that out there, but the questions before us are, how are we getting screwed, how do we communicate that to people effectively, and who do we really want to target in any kind of effort with this?
One of my favorite tweets that I’ve seen in a long time is “For the oppressor, peace is not the absence to violence, but the absence of a response to the oppressor’s violence”. It makes sense logically that most of this would have to, for the purposes of the ruling class, go undetected. We would have to be fully unaware of our subjugation, right? We have to have pretty much no idea how to fight it, not have the tools to do so. And in the social media era, we don’t withhold our labor anymore to the extent that we used to, right? We don’t strike to the extent that we used to. We use social media, and we could use in a different way, but we use it as this dissociative space, this space that we enter that actually can facilitate activism, but often impedes activism, but it doesn’t have to. We could use it better to form our coalitions.
Having this conversation is important, it’s kind of difficult to talk about how we would establish class-consciousness, because that is what we’re talking about. Marx would say there’s a great portion of the population who will never actually understand their subjugation, but they’re taught that they have something to be gained from this system. That by participating in it, that it can work for them, but really they’re just being tokenized but that’s a whole other conversation. I feel that frustration every day and I’m sure we all do.
I feel like, in terms of how we’re getting screwed, they win as soon as you have to justify that you’re being ripped off. For me, it’s like, why in the world should a young person go into debt in order to acquire a basic survival skill? Period. No society does this, you don’t see out there in the biological world- the younger generation of cats or dogs is not indebted to their older generation. That’s not the way it works, and furthermore, social progress depends on the liberty and the imagination of the younger generation. Enough said. The rest is technospeak. That technospeak is important because you have to fight it head to head, but you don’t have to do it; the economists on the case can do that, and they can write up for you the two sentence explanation. It involves a little bit of study if you want to have the fight at that level, and more power to you if you do, but the people who burned their draft cards didn’t need an explanation.
They just knew that everyone was getting screwed by that war. There were no winners, this isn’t helping us. I say the more intuitive and gut-level you can keep it, the easier it is to mobilize people, and the more that mobilization grows, then it takes on a livelihood of its own. To my mind, when I first ran for national office, that was the issue that was on fire. There was a student debt movement that was exploding, right under our noses. Starting in 2012 we made ending student debt, making public higher education free, at the center of our campaign, along with the Green New Deal, in fact we made it part of the Green New Deal. You don’t have to justify that. Everybody knows this, but it’s percolating… It’s like the elephant in the room, it’s the emperor with no clothes. Everybody knows that. Don’t feel like it’s on you to justify it. This is your reality, it is the reality, and the more it gets talked about, the more power it will have.
In terms of this question, who are we targeting, there is an important strategy that has to go forward, and it’s not immediately obvious whether we’re targeting the loan companies.
In my view it’s the political system that enabled them in the first place. Just solving one issue, that is, education, isn’t going to solve healthcare, the climate crisis, the nuclear wars and nuclear proliferation. All of that needs to be solved, and it needs a democracy, a true small-d democracy. In my mind, that’s what a political party is. A political party is a broad-based coalition that is across issues, across generations, and across geography, because no one person can do this alone- but we need a broad system-wide, comprehensive rebellion in order to win back our future. Because it’s falling between our fingers right now, very fast. I say, let’s mobilize, and there are some very good political frameworks that you can link forces with to help make that happen.
On the question of how we’re being screwed, it’s extremely important for any political movement that focused on student debt as an issue, to kind of articulate the obvious thing, which is that when you’re deeply indebted, whether it’s student debt or medical debt or any type of debt, you’re not free, and you’re in a state of deep unfreedom, and it’s important for the left broadly to reclaim the mantle of a freedom movement. The right historically, and definitely in the last few decades, has called itself a movement for liberty and freedom, but focusing on, how John Dewey wrote about, You’re not free if you have 50,000 in student loans, and you’re not free if you have to pay a certain amount each month. Saying that we, the left, are going to make you free by setting you free from the shackles of being indebted, I think that’s an important thing.
On the question of who we’re targeting, I definitely agree with Dr. Stein, obviously the loan companies are a good villain in this story, especially when you’re framing it politically, but ultimately the goal should be forcing some sort of political movement. Right now you see Bernie Sanders and Ilhan Omar calling for something along the lines of massive debt forgiveness that they’re on the fringes. When you force the conversation you see a lot of people on the center and the center-left, because it’s a way to avoid the very worst-case scenario which is a mass default.
And to go back to your question about not getting caught up in the circus of the election because of these enticing little carrots hung out there like that Ilhan Omar and Bernie Sanders are saying end student debt, but remember what to Bernie Sanders last time- And it wasn’t just Bernie Sanders, before Bernie Sanders it was Dennis Kucinich. Before Dennis Kucinich it was Jesse Jackson. Before Jesse Jackson, you can go back one by one to the end of the World War II, when it was Henry Wallace who was a socialist that made Bernie look like a wallflower, and he was about to get the nomination to run with FDR as his VP at a time FDR was very sick, it was known he was going to die in office. It was essentially the Presidential nomination, and this was in Chicago and they declared a fire emergency as he was about to be nominated and adjourned the convention and pulled strings and the next day instead of an ardent socialist, anti-war, extremely gracious and smart, well-loved around the world, internationalist, instead of him we got Harry Truman, the nuclear bomb, Hiroshima, Nagasaki and the Cold War. It’s important to remember, that ain’t changed!
While we have some wonderful progressives who are speaking out, the whole party keeps marching to the Right. So this process is not succeeding, and we don’t have very much longer to go. The UN Science commission we have about 11 years to make transformative change in our climate policies, or it’s kinda going to be too late. We don’t have time. Arguably there’s not time to keep going through these paces here. We know where this goes. Watch it, influence it, but don’t rely on what’s going on in the two parties of war and Wall Street. They have some good people, but those people are being used as sheepdogs to prevent a real progressive movement from actually getting its feet on the ground and applying some leverage.
A lot of times, the company I work at, the company she works at, you don’t need a four-year degree but they’re still listed as you have to have a college degree to even get in the door at this company. Would it be appropriate to target those companies to remove those minimum requirement so that we’re not burdened with these loans that you don’t really need a college degree for?
I think that brings up a really important point, and as you point out, and we’ve been talking about this, our labor and our participation in society is linked to our education and our abilities, and it is based on these degrees and credentials, and honestly, they don’t mean quite the same thing they meant even ten years ago. With the internet people are educating themselves in rapidly transforming ways, and we have this archaic system that hasn’t really caught up. This is why a disruptive movement that is essentially threatening to burst the student loan bubble as its objective, which does seem counterintuitive- we don’t want the economy to crash because we’ll all suffer, but it’s also our leverage that they’ve given us. They’ve taken our debt and given it this kind of strange power, because they’re gambling on it in this way. I think my answer to that is that targeting specific companies would be good, but I think ultimately the movement would probably start with targeting a smaller student loan company or some aspect of the university system, but it would have to move to a larger strike against, and a disruption against the status quo, because otherwise they’ll never change the systems and keep us doing the things we’re doing until it’s too late.
Of course there are people who acquire jobs in education, but we exist in a social space that provides incentives so that we gather in the market to these specific points. We have these social incentives to get an education, with the promises associated with education, so we gravitate to this point in the market, and provide our money, allow ourselves to be subjugated by debt so that we can acquire this thing. this thing that carries social capital of course, human capital as well. And we’re being lied to and this dates back to the neoliberal frame originally, where we’re taught to scale our successes and failures against that of others. We know that it’s shameful to not get on what we’re told is should be that path towards mobility, to do the things that are socially normative, and education in some ways has become the social milestone, outside of it just being directly an investment, it’s something we’re expected to do to fully participate in this economy.
If I can just add to that, we’re being put through these paces, made to feel like we have to get these degrees in order to justify our existence, but our whole education system is very screwed up. It’s not just the loans, it’s the school-to-prison pipeline. It’s taking away the resources, so that our schools become militarized and regimented, and the community-building goes out of them. It shouldn’t be a burden to be educated, it should be liberating to be educated. And that should be a right that we all have, it shouldn’t be a requirement by a corporation. It should be a right that we have in our communities, in a way that enriches us from the get-go, and every step of the way. It would be hard to generate much of a mobilization around removing one piece of that noose, if you know what I mean, it’d be hard to build a movement around that, so just as a practical thing, we might want to fold that into some bigger effort towards liberation and education in a bigger sense of the word.
The way I see it, in the current moment, we have something of a contradiction in that, in order to fully participate in the highest reaches of the social spheres, of the economic sphere, of the political sphere, college degree is essentially a requirement just as a highschool diploma was a requirement 100 years ago and continues to be. And the contradiction is that there are a huge number of people who can’t afford to go to college, or can’t afford to go to college without burdening themselves with a huge amount of debt. There are two ways to address that contradiction. The first is to ameliorate that stigma, and the second is to make a college-level education a right. I think both are compelling, I think the sense that a college diploma is not… y’know, I’ve never thought that people learn a whole lot in college. I think it’s an unattractive social thing, but I think it’s too prevalent a cultural force, and it’s too entrenched in people’s minds to truly be eliminated, so I think that the second option free for all and forgiving student, and making it a rite, just as much a rite of passage, I don’t mean a right as in the constitution, but rite, just as a high school diploma is now, and I think that’s the more compelling option.
I think if we’re promoting the idea that the education is a right obviously it should be accessible to everybody, but some different points we’d see people promoting it as an investment. But if it’s an investment it shouldn’t be socially promoted to everybody. There should be alternatives put in place, and we have really shitty skills training programs in the US, right? So, if the alternatives for human capital accumulations aren’t there, aren’t funded, aren’t available to us, then it is a right, and we should all be able to access it for free.
Jill: I wanna add one other thing- this goes back to the question about targeting. One basic point, we don’t just have to target institutions. We can target specific elections. It’s important to remember how many people are impacted here. It’s enough to basically be a plurality that is a winning force in any election; a Governor election, a city council election, a school-board election. And there are things that can be done at the local level, like San Francisco established (not in terms of debt, but they created a free public college program. Anyone who gets elected to office has a lot of weight in their state legislature and congress, whatever, you can become an advocate for debt reform, and for ending debt, even though you don’t singlehandedly have the authority to erase that debt, you can be a very powerful voice. I want to encourage people to think about leaning on whoever they vote for, at the local level, at the state level, to include debt forgiveness and higher education as part of their basic platform. We can mobilize and organize people around that issue to actually win races, and it hasn’t yet been employed as a political force, but it’s begging to be because it’s huge. It’s so fixable, and it has impact at the local level.
Eli: It really does seem like this is the moment. It’s gone such a long way in the past few years.
I actually wanted to make a comment, and I don’t want to backtrack too much with the important points you just made, but it’s clear that if the liberal arts bachelor’s degree is the gateway to everything, any kind of employment in this country then that is problematic, obviously we need more licensure and apprenticeship programs, we need to do more for those who the liberal arts bachelor’s degree is not the right approach. At the same time, I’m concerned that if we go at it by attacking employers who require these credentials, or attacking academe, we have to remember what’s happening right now, that academic institutions are being attacked as hotbeds of socialism, and the flight of reason, the loss of acceptance of scientific logic and data is what’s gotten us into this mess.
I have a brief comment. I’ve been living in the NYC shelter system for 7 years. I have a Master’s degree, and I have met so many people in this system who have degrees, who have student debt, and they’re living in the selter system for all sorts of reasons. J.Ds, psychology, accounting, even engineering, and degree, you can find people with those degrees living in the shelter system. They tend to be more ashamed about it, I’ve ran as a Green for the House and I brought it up, student loan debt is a serious issue and I’ve made it part of my campaign. I’m not indignant, it’s an issue that really needs to be dealt with, because people act like someone with a college degree in the shelter system is an anomaly, and it’s not like that’s the majority, but it’s certainly not an anomaly, very common.
One thing that I think is missing a little bit from this is that there’s a lot of us who would pay to go for whatever reason, take out loans to go to school, but then most people aren’t able to pay it so they frustrated. It’s oppression for sure, but it’s not the only type of oppression, there’s plenty of others. When you make that switch it’s a lot like y’know, the billionaire who can’t buy the yacht he wants, being frustrated and oppressed, “I’ve got a right to make this money!” Well, we have a right to education, it’s true, but you make that point, you can radicalize a lot of people. You hear them complaining, and rightfully so, about their student loans, but that’s why I think it’s so important to [direct actions] towards the institutions, you take that step about addressing them, confronting them with one day protests, whatever it is, then it’s gonna radicalize them. Because you say, how can I be complaining about this thing that’s happening to me? Look across the board! Black people and gays, people in foreign countries that never had these privileges. That’s when you really start to connect the dots.
A student debt boycott would have to be centered around class-consciousness, and around the people who have the privileges that come with education (which should be a right, but there are privileges), to use the privileges they have to connect their struggle who are more marginalized and who are more oppressed, and I think that is so crucial to everything we are saying. If any of you want to say a few more things we can just wrap it up and call it a day.
Student debtors, mortgage debtors, medical debtors, we’ve all been lured into debt accumulation on the assumption that we’d be able to access full consumer citizenship, full ability to participate in this economy, we should not go into debt acquiring something that we’re told that we need to secure our rights, and I feel like that’s the note I want to end on.
I want to add that there’s enormous power in this issue, because it impacts so many people at the prime of their life, and it kind of devastates from the get-go. This is perfect storm for organizing, and it’s not the only issue, but it dovetails with everything else. I hope that, y’know, I’m really grateful to Eli for convening this, and advancing the issue, cause you don’t see it being taken on right now, so everyone in the room here gets a pat on the back for kind of being at the forefront of this. I’d say let’s not stop here, let’s make this a beginning. I wish we had a sign-up sheet, maybe we can put a couple out if you want to stay in touch. I don’t think this will be the last of it.
I just wanna say that this is an issue that cuts across all party lines, I think that it’s something that has tremendous, fundamental appeal to a lot of people. Not only from self-interest, but also from a basic sense of morality, and I just want to say that it’s an incredible honor to be here with this distinguished panel and with all of you.
One thing, Mike Gravel is running for President. Not to run, but he is running to win, to change the conversation, and the most meaningful thing you can do for the campaign is to donate to the campaign. One dollar will help them increase their donor count and get them to closer to the debate stage in July. So yeah Mike Gravel 2020, it’s really meaningful if you can donate to that. Thank you everyone so much for coming.
Read more about boycotting student debt at DebtRevolution.org!