An organizer with Occupy’s Strike Debt and its Debt Collective, Appel explains how the projects work in seeking out, buying and abolishing debt in collections.
Economic anthropologist Hannah Appel
Tavis: The debt load carried by Americans right now is a daunting more than 77% of all households in debt, one in seven Americans being pursued by a debt collector.
Stepping into that to help average Americans get out from under the economic burden is an offshoot of the Occupy Wall Street movement called Strike Debt. One of the initiatives called the Rolling Jubilee works to find, buy and abolish debts that have been turned over for collection.
Joining me now to explain more about this Strike Debt is activist and UCLA assistant professor, Dr. Hannah Appel, an economic anthropologist and Fulbright Scholar who earned her PhD at Stanford. Dr. Appel, good to have you on this program.
Hannah Appel: Thanks so much. It’s great to be here.
Tavis: Let me just jump right in. What is Rolling Jubilee?
Appel: So the Rolling Jubilee is something we could think of as a social hack, right? It’s an action that allows us, that in fact forces us, to rethink, to reimagine what we thought we knew about debt.
In the past, debtors experienced debt as isolating, shameful, a reason to be afraid, a reason not to open the mail, a reason not to pick up the phone. And the Rolling Jubilee and Strike Debt work more broadly in saying what if debt was not about individual isolation, shame, fear? What if debt was a platform for collective action?
So the Rolling Jubilee, by buying up what’s called distressed debt for pennies on the dollar and then sending a letter to the debted that says, hey, we have forgiven this debt. We don’t try to collect the debt. We abolish it. It asks people to rethink that, to look at it and say, wait a minute. First of all, you can buy debt for pennies on the dollar?
Most people think that, if their debt is $1,000, they owe $1,000. They don’t know that it circulates on secondary markets for mere pennies on the dollar, that debt collectors are making hundreds of percent profit by forcing me to pay the full amount when in fact the debt collector bought it for only pennies on the dollar.
So we really – in part, it’s really about public education. It’s really about asking people to step back and to rethink that just as you introduced it in the beginning of the show as a systemic problem and not as a problem of the failure of individuals.
And, of course, in the Rolling Jubilee project, we’re able to help thousands of debtors along the way and that’s wonderful, but it really is about asking the entire nation and beyond to rethink debt as a political platform.
Tavis: How did debt – to your mind at least, given your research, how did debt exacerbate and explode the way that it has? I mean, student loan debt now exceeds credit card debt in this country and that’s just one aspect of it. But why as Americans are we in such debt these days?
Appel: You know, it’s a really interesting question. I would take it back about 20 or 30 years to what some people will refer to as financialization, meaning when was the time when the social safety net, what we used to think about as social goods, education, healthcare, when did those things explode in price and when did people start to have to debt finance those?
In other words, when was the University of California system no longer effectively free? When was it that real estate prices shot through the roof and that people actually had to go into crippling debt for the basic things we need to survive?
Certainly medical care and, at this point, student debt, and that really has been over the last three decades when there hasn’t been as much public funding and people are having to go into radical debt just to send a kid to college. Kids are currently graduating with about $30,000 worth of debt on average from all schools in the country.
Tavis: You used an example a moment ago, Hannah, of if you owe the bank $1,000. Let me go back to that example because – and I think your work underscores this – that if you owe the bank $1,000, then the bank essentially owns you.
But if you owe the bank a million dollars, you basically own the bank because you get to dictate a bit more about the terms of how that’s going to be handled.
But that’s so ironic to me that $1,000, they basically own and control you and they make you feel the brunt of the weight that they place down on you. But if you owe a million dollars, you got a little more flexibility in some ways.
Appel: Yeah. So let’s just take the category of student debt for a minute. Student debt right now is approaching $1.3 trillion dollars. So we could turn that adage and say, if I owe the bank $25,000 for my student loans, then the bank owns me. But if we as student debtors owe the bank $1.3 trillion dollars, then we actually have a tremendous amount of power, an untapped power, in our hands.
Millions of students are defaulting on their loans every year already, but we’re not doing so in an organized fashion. We’re not doing so in a way that brings the sort of collective power of that figure whether as student debtors, whether as mortgage debtors, whether as medical debtors, to begin to have power to actually negotiate terms with creditors.
And that’s Strike Debt’s newest project that we’re so excited about, which is called the Debt Collective, and it’s basically a platform. We think of it as the new factory floor where debtors can come together, act together, organize together, and actually really start to make demands.
Tavis: How does that actually happen, though? Because as much as I like the idea and turned on by the idea of us debtors – and there are many of us. I count myself included – who could all come together and use this issue, as you said, as a political platform, certainly heading into the 2016 presidential race, I can see the framework for how that could happen.
And yet, I know the financial institutions don’t respond that way. They deal with individuals and they make every individual, as I said earlier, feel the pressure of whatever they want to apply based upon, you know, what you owe. So how do you transition from this being an individual fight to it being a collective fight?
Appel: Yeah. That’s an excellent question and that’s exactly what the Debt Collective is trying to approach. You used the example of financial institutions approach people as individuals. But imagine what we can do on the Debt Collective, for example, with data analysis. We can do all kinds of things.
But one of the things that we can do is figure out, okay, who has debts with which institutions? So we could organize debtors, for example, institution by institution. So even though institutions would like to deal with debtors as individuals, we could get a whole group of individuals who are in debt to one institution whose debt originated with one specific institution and say, okay, let’s set our terms.
Let’s pay our monthly payments, those of us who can, into an escrow account which is a long-standing historical tactic. In other words, we don’t necessarily have to be financially disobedient. We can show that we’re paying money monthly, but we’re going to pay it into an escrow account.
We’re not going to pay it to that institution until the interest is just, until the principle amount comes down reasonably, until we feel that certain kinds of debt that were exploitative – we can think back to the mortgage scam – until those debts have actually been abolished, until those debts have been renegotiated.
In other words, certainly financial institutions want to treat us as individuals, but because we owe the bank those trillions of dollars, we actually have a tremendous amount of power in our hands to organize and what stands between us and that ease in fact organizing. And, again, that’s the platform we’re setting up at the Debt Collective.
Tavis: I hear my grandmother, Big Mama, my late grandmother, saying to me, “It’s too much like right.” It’s just too much like right. That’s her way of saying it’s such a great idea. It makes so much sense that it ain’t easy to make happen. It’s just too much like right.
And you’ve raised the point about organization and mobilization ’cause it seems to me that’s the difficult part here. The idea makes perfect sense. Using it as a political platform makes perfect sense.
But how does one go about – I mean, I feel the same about the issue of poverty which I do a lot of work on, that everybody understands the argument. Everybody gets that poverty is threatening our democracy. Everybody gets that poverty is now a matter of national security. Everybody gets that income inequality is a defining issue of our time. Even the president finally gets that now.
So everybody gets that and yet trying to organize and mobilize poor people into a collective is the difficult work that needs to be done. So I love the idea, but how do you make the transition from the idea, from the moment, to some momentum and into a movement?
Appel: Yeah. So, you know, the Rolling Jubilee – our most recent debt buy was student debt.
So on September 17, which was the third anniversary of Occupy Wall Street, we announced that we had bought and abolished $4 million dollars of student debt for students at a college called Everest, which is for-profit college, national chain under the Corinthian Colleges, Inc. corporation. And I feel like that’s a really good example of how we can start to mobilize because that has actually attracted a lot of media attention, right?
So we can take that and we leverage the Rolling Jubilee launch into the launch of the Debt Collective and we got 3,000 people who put their debt on a map, who signed up within two days, right? And now we’re about a week out and we have thousands and thousands of people who are ready.
We’re actually working with those Everest students here in the Los Angeles area and, more broadly, helping them, showing them, what the platform of a Debt Collective could look like. So we have a legal team that works with us that starts to think about, okay, well, what are your rights, Everest students, Corinthian students, right now with the Department of Education?
Right now, you have the opportunity if your school is being closed to apply as an individual for a debt waiver. What would it look like if we could make that a collective solution? How can we use all of the media attention that’s on Corinthian, that’s on the Rolling Jubilee, to say, hey, wait a minute. We don’t want each of you to have to go through this tortured bureaucratic process.
We think that you all deserve a debt waiver and that there should be a simplified process and we can actually use both our legal resources, the media resources that have been trained on us right now, to change, again, those debtors’ situations from individual situations that are incredibly difficult, bureaucratic, and you never think you’re going to succeed to something that’s a much more simplified collective process.
It’s actually looking like there’s a tremendous amount of momentum behind that. I’m thinking of Maxine Waters as behind it. Even in such a short time, there’s been a lot of momentum around this idea of collective action around that.
Tavis: So here’s the exit question. I can think, Hannah, of any number of powerful lobby organizations in Washington. Seniors, AARP comes to mind, teachers union comes to mind, NRA, the gun lobby comes to mind, but I can think of no more powerful lobby in all of the country than financial institutions.
So what’s the response going to be of these banks because that’s the thing – I can’t imagine what interest there is for them in this regard.
Appel: Right, yeah. I mean, certainly the idea of a Debt Collective is not in the interest of the banks and I do imagine that there will be a lot of counter pressure.
However, given the statistics that you outlined at the beginning of the show, given how many of us are in debt and given where public opinion is in this country about the banks right now, I actually think we could have a tremendous amount of legal decisions on our side. I think a lot of the media will be on our side.
In other words, I feel like public pressure against the banks, public pressure to get us out of what we might call odious debt, of what we might call exploitative debt, and into reimagining how we fund social services in this country, working class kids, low income kids, middle class kids, should not graduate from “public schools” with $30,000 worth of debt.
I actually think the vast majority of this country across the political spectrum would agree with that. And that kind of unity is not something the banking lobby can fight easily.
Tavis: Very quickly, can you see this becoming an issue in the 2016 presidential election where candidates are forced to take a position on this issue?
Appel: We are out to be kind of a new labor movement in certain ways. We work alongside the labor – the idea is not to replace the labor movement, but to say the way that the labor movement changed working conditions for working people, we would like to be that same movement for indebted people, especially because in certain ways so many more people are indebted than have good jobs.
So in that way, we absolutely want it to be a huge impact issue. Certainly if people have to deal with it in the 2016 election, then we’ve done our job.
Tavis: It’s Rolling Jubilee and the Debt Collective, Hannah Appel of UCLA. Good to have you on the program.
Appel: Thanks so much. It was wonderful to be here.
Announcer: For more information on today’s show, visit Tavis Smiley at pbs.org.
[Walmart Sponsor Ad]
Announcer: And by contributions to your PBS station from viewers like you. Thank you.