Tags: Ross | debt | credit | household

Author Ross Argues for 'Debt Refusal'

By    |   Monday, 17 November 2014 07:59 AM

Andrew Ross, a professor of social and cultural analysis at New York University, appeared on C-SPAN to talk about his new book, Creditocracy and the Case for Debt Refusal. Ross is not to be confused with the prolific columnist and talking head Andrew Ross Sorkin. One wonders if Ross might be the only professor of "social and cultural analysis" in America, if not the world.

On the surface, "debt refusal" might appear to be a crackpot idea, and it could turn out that it is a crackpot idea even beneath the surface. However, it is worth looking at as an example of some of the ideas being floated, mostly on the left, as responses to the ongoing, permanent financial crisis. The conservative view of this would be that it is timely to look at alternatives to government bailouts, which are the default solution, and here the pun is intended.

The interview was conducted by Peter Slen, who started by asking about the dedication of the book "to fellow activities in the debt resistance movement." Ross responded that this refers to various groups he has been working with in the wake of Occupy Wall Street, a movement that revolved largely around the "debt crisis," manifested not only in the debt of nation-states but also of households. This writer would point out that an upcoming article will present expert views on the process of transferring the debts of nation-states to household taxpayers by means of government bailouts, usually at full face value.

Ross spoke of a project called the "rolling jubilee," a "debt abolition" project that undertakes a kind of self-help alternative to the slow pace of action by the federal government by raising money to buy debt cheaply in the secondary market and then abolish it. The movement has retired $18 million of debt, including $4 million of student debt recently after starting with medical debt. (Obviously this is an immaterial amount, but the scale can be expected to grow.)

Again, for readers who might think these are crackpot ideas, Rep. Spencer Bachus, R-Ala., has spoken of jubilee-inspired ideas in the past, for example, with respect to sovereign debt. Of course, the fact that an idea has been espoused in Congress does not mean it isn't crackpot, but it indicates significant sponsorship when the advocate is or has been a committee chairman.

"Creditocracy," according to Ross, is a society characterized by a majority of people living with a burden of debt that can never be repaid. He asserted that the financial industry fosters a circumstance in which customers are maintained as "revolvers," who never pay off their debts but rather continually pay late fees and other extra charges to service their debts. He estimated the aggregate household debt in the U.S. at $12 trillion, a number that fell after the 2008 crisis episode but began to rise again after the second quarter of last year and is again rising "quite precipitously." He charged that the financial industry operates under a model based on "swindling, fraudulence and deceit."

Ross clarified that he is not calling for the abandonment of all private debt but rather to apply "moral arguments" to distinguish between legitimate and illegitimate debt.

Most provocatively, Ross called for increased transparency in accounting for the use of tuition proceeds by institutions like NYU, and he charged that the university had funded the purchase of homes for star faculty, including a million-dollar beach house for the president himself. He blames "administrative bloat" for the increase in college costs that ultimately feeds back into student debt and to taxpayer subsidies.

(Archived video can be found here.)

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Andrew Ross, a professor of social and cultural analysis at New York University, appeared on C-SPAN to talk about his new book, Creditocracy and the Case for Debt Refusal.
Ross, debt, credit, household
Monday, 17 November 2014 07:59 AM
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